Precedent Decisions With Index Publish Able 02-09-10 Revised

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ESC PRECEDENT DECISIONSGOVERNING THE CONTESTED UNEMPLOYMENT INSURANCE MATTERS

ARISING UNDER THE EMPLOYMENT SECURITY LAW OF NORTH CAROLINA

[These Precedent Decisions are constantly reviewed for the purpose of revisionsto reflect changes in Law, Precedents and Published Policies.]

STATEMENT OF POLICY

An adequate supply of the ESC Precedent Decisions shall be maintained by alloffices of the Employment Security Commission (ESC). Upon request, a copy of thesedecisions must be provided to the public at no charge.

N.C.G.S. §96-4(c) Publication. – The Commission shall cause to be printed fordistribution to the public the text of this Chapter, the Commission’s Precedents andgeneral rules, and any other material the Commission deems relevant and suitable, andshall furnish the same to any person upon application therefor. All publications printedshall comply with the requirements of G.S. §143-170.1.

ESC Precedent No. 21.17(B) provides that ESC may designate certain of itsCommission decisions as precedents. ESC is controlled by such precedents except asmodified by judicial review. All precedents are published and distributed to theadjudicators, appeals referees and other ESC employees as is deemed necessary to ensureconsistency in ESC proceedings and decisions.

Employment Security Commission of North CarolinaPost Office Box 25903

Raleigh, North Carolina 27611

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INDEX

NUMBER TOPIC PAGES

Precedent No. 1 Left Work--Health or Medical Reasons 4-6Precedent No. 2 Left Work--Reduction in Pay 7-9Precedent No. 3 Discharge--Absenteeism/Incarceration 10-11Precedent No. 4 Discharge--Totality of the Circumstances 12-14Precedent No. 5 Discharge--Employee's Untruthfulness 15-17Precedent No. 6 Procedure--Continuance; Real Evidence 18-19Precedent No. 7 REVOKED Precedent No. 8 Discharge--Absence; Childcare; Good Cause 20-24Precedent No. 9 Substitute Teachers--Between Terms Denials 25-26Precedent No. 10 Hearing--Procedural Due Process; Intimidation of Witness 27Precedent No. 11 Left Work--Reduced Work Hours; Availability of

Hours in Supplemental Position; Not Good Cause 28-29Precedent No. 12 Discharge or Leaving--Resignation Not Withdrawn;

Compensated Notice Period 30-32Precedent No. 13 REVOKEDPrecedent No. 14 Commission Approved Training--Directed to Attend; 33-35

Failure to Attend; Good CausePrecedent No. 15 Discharge or Leaving--Employer's Language 36-38Precedent No. 16 Discharge--Employment Application; Willful Omitting Data 39-41Precedent No. 17 Hearing--Procedural Due Process; Suitable Hearing Space;

Sequestration of Witnesses 42Precedent No. 18 Left Work--Overtime Compensation 43-46Precedent No. 19 Left Work--Suitability of Offered Continuing Employment 47-49Precedent No. 20 Hearing--Procedural Due Process; Interpreters 50-51Precedent No. 21 Discharge--Refusal to take Drug Test; Work Rule 52-56Precedent No. 22 Tax--Independent Contractor; Intent of Parties 57-60Precedent No. 23 Availability for Work--Seeking Work After Obtaining Job 61-64Precedent No. 24 Discharge--Substantial Fault; Reasonable Control;

Reasonable Job Requirements 65-70Precedent No. 25 Fair Hearing --Continuances; Timely Request; Reasons 71-73Precedent No. 26 Discharge--Misconduct; Drug-Related Conviction 74-75Precedent No. 27 Left Work--Health Reasons; Pregnancy 76-78Precedent No. 28 REVOKEDPrecedent No. 29 Left Work--Good Cause; Attributable to Employer; Lack of

Reliable Transportation; Work Site Relocated 79-83Precedent No. 30 ORDER REVOKING IN PART 84Precedent No. 30 Appeals Decision on Remand; New Findings of Fact 85Precedent No. 31 Tax--Independent Contractors; Right to Control Work 86-93Precedent No. 32 Employment Relationship--Continuing; Intent of Parties;

Temporary Personnel Service Employer; Failure to Accept AllSuitable Work Assignments - Availability or Work Refusal 94-97

Precedent No. 33 Employment Relationship--Continuing; Discharge or Left Work;Availability or Work Refusal; Burden on Claimant to ShowGood Cause for Failure to Accept Suitable Work Offer 98-100

Precedent No. 34 Discharge--Drug-related; Results of Controlled Substance Test;Validity Established by Affidavit - Competent Evidence 101-104

Precedent No. 35 Left Work--Good Cause; Attributable to Employer; SexualHarassment by Supervisor; Failure to Seek Redress UnderGrievance Procedure Not Disqualifying 105-108

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INDEX

NUMBER TOPIC PAGES

Precedent No. 36 Subsidiary work; Secondary employment; Separation frompart-time work; Part-totally unemployment. 109-112

Precedent No. 37 Left Work--Good Cause; Attributable to Employer; Method usedto leave work; Reduction in all employment benefits; Reduction inhourly wage. 113-115

Precedent No. 38 Withdrawal of Appeal; Authority of hearing official to disregardwithdrawal request by appealing party; Subsequent appeals decisionon merits of separation issued null & void. 116-117

Precedent No. 39 Involuntary successorship (G.S. §96-9(c)4; statutory construction requiresconsistency in interpretation of related provisions; definition of "all" and"substantially all;" what constitutes buying assets and buying all of theorganization, trade or business 118-120

Precedent No. 40 Discharge or Left Work: Resignation; Notice Period Policy 121-125

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EMPLOYMENT SECURITY COMMISSION OF NORTH CAROLINA

PRECEDENT DECISION NO. 1

IN RE TALBERT(Adopted December 17, 1982)

FINDINGS OF FACT:

1. The claimant last worked for Charlotte Machine Company on July 30, 1982. FromAugust 1, 1982 until August 28, 1982, the claimant has registered for work and continued toreport to an employment office of the Commission and has made a claim for benefits inaccordance with G.S. 96-15(a) as of the time the Adjudicator issued a determination. Theemployer appealed the Adjudicator's determination, and an evidentiary hearing was held byCharles E. Monteith, Jr., Appeals Referee, under Docket No. XI-UI-74483, who held that theclaimant was disqualified for unemployment benefits. The claimant filed a timely appeal to theCommission.

2. The claimant left this job under the following circumstances: He reported to work onAugust 1, 1982. He informed his supervisor that he needed to check on some matters at theemployment office. Claimant then left and did not return until the following week and then onlyto pick up his tool box.

3. Claimant was hired as a machinist/welder. He began work for Charlotte MachineCompany on July 29, 1982 and last worked on July 30, 1982. In the course of his work claimantwas required to lift items which he considered heavy and which he believed caused him to havepain in his back. Claimant stated that he had a pre-existing back problem at the time he beganhis employment on July 29, 1982, but he failed to indicate such on his employment application.The employer would not have hired the claimant for the job had he known about the claimant'spre-existing back problem because the job as a machinist/welder required lifting of various itemsof various weights.

4. At no time did the claimant indicate to the employer that he was having back painsuntil he returned the following week to pick up his tool box. Nor did the claimant request atransfer to other work. Other than presenting receipts from doctors indicating that he had beentreated for back problems, the claimant presented no medical evidence as to restrictions on thetype of job claimant could perform.

5. When claimant left the job, continuing work was available for claimant there.

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IN RE TALBERTPage Two of Three

MEMORANDUM OF LAW:

The Employment Security Law of North Carolina was enacted by the General Assemblyfor the purpose of paying benefits to individuals who are unemployed due to no fault of theirown and in order that such individuals might have some protection against the hazard ofunemployment and to insure that such individuals might have the burden of unemploymentlightened by the payment to them of benefits during periods of unemployment. The primarypurpose of the Act is to provide some source of income during temporary periods ofunemployment to individuals until such individuals are able to find work and again becomeemployed. The Act never was intended to encourage idleness and the benefit payments neverwere intended to replace the income or take the place of wages provided by steady work. Norwere unemployment insurance benefits intended by the General Assembly to be sicknessinsurance. Because a person is unemployed does not within itself entitle such individual tobecome the recipient of unemployment insurance payments.

There are certain conditions set forth in the Act which every claimant must meet before heis entitled to receive benefits. These conditions are set forth in G.S. 96-13 and G.S. 96-14 andrelate to the claimant's eligibility for benefits and to possible disqualification from receivingbenefits for a period of time under certain circumstances.

G.S. 96-14(1) provides that an individual shall be disqualified for benefits for the durationof his unemployment if it is determined by the Commission that such individual is unemployedbecause he left work voluntarily without good cause attributable to the employer. In order todisqualify an individual or claimant under this provision, it must be found that he (1) voluntarilyleft work and (2) such leaving was without good cause attributable to that individual's employer.

In ascertaining whether or not an employee voluntarily left his employment, the mentalprocesses, constraining or compulsive forces or objective influences, or the freedom or lack offreedom from external compulsion or necessity which led up to the claimant's leaving work mustbe considered. As to the existence of "good cause attributable to the employer," the Commissionshould in every case be -fully satisfied that, where an employee has left the employment, thereasons for so doing were of an impelling character which, in the opinion of the Commission,afforded ample and complete justification for the severance of his employment. This wouldexclude all fictitious or feigned reasons or excuses for failure to continue in the work and wouldcomprehend only such causes as operated directly on the employee which made, in the opinionof the Commission, his continuance in the employment impossible, or attendant with suchcircumstances as to make it unreasonably burdensome for him to continue therein. ESCInterpretation No. 48, dated January 5, 1944.

The Commission has long recognized that illnesses of such character and nature as todisable an employee from continuing in the employment could be such a cause as to make itnecessary for the employee to discontinue his work as long as this condition existed; i.e.,compelling health reasons. Because such illnesses deprive the employee of freedom fromexternal compulsion or necessary in deciding whether to continue in employment, the

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IN RE TALBERTPage Three of Three

Commission has consistently held that a leaving of employment for compelling health reasons isan involuntary leaving and not a voluntary one covered under G.S. 96-14(1).

In order to sustain a determination that a leaving of employment was involuntary due tocompelling health reasons, a claimant must (1) introduce competent testimony that at the time ofleaving adequate health reasons existed to justify the leaving, (2) inform the employer of thehealth problem, (3) specifically request the employer to transfer him to a more suitable position,and (4) take the necessary minimal steps to preserve his employment such as requesting a leaveof absence if appropriate and available. See Deiss v Unemployment Compensation Board ofReview, 475 Pa. 547, 381 A.2d.132 (1977), Carroll v Board of Review, 9 UnemploymentInsurance Reporter (CCH), 11,089 (1982).

The medical evidence introduced must support the claimant's contention that at the timeof leaving his health precluded him from performing his assigned duties. See Coyle vUnemployment Compensation Board of Review, 56 Pa.Cmwlth. 170, 424 A.2d 588 (1981);Counts v Commissioner, 10 Unemployment Insurance Reporter (CCH) 8288 (1982).

In the case at hand, claimant has failed to meet his burden of proving either the 2nd, 3rd,or 4th requirements in order to establish an involuntary leaving for compelling health reasons.Although the medical evidence showed that adequate health reasons may have existed at the timeof claimant's leaving, claimant failed to inform his employer, request other suitable work or toeven attempt to preserve his employment by taking the necessary minimal steps. It must,therefore, be concluded that claimant has failed to establish or prove an involuntary leaving ofemployment for compelling health reasons.

Furthermore, it is concluded that the record evidence and the facts found therefrom donot support a conclusion that the claimant has met the burden of showing good cause attributableto the employer for a voluntary leaving. In re Hodges, 49 N.C.App. 189, 270 S.E.2d 599 (1980);In re Vinson, 42 N.C. App. 28, 255 S.E.2d 644 (1979).

The claimant must, therefore, be disqualified for benefits.

DECISION:

The claimant is disqualified for unemployment benefits beginning August 1, 1982, andcontinuing until the claimant qualifies for benefits in accordance with the Employment SecurityLaw.

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IN RE SPRINGER(Adopted January 13, 1983)

FINDINGS OF FACT:

1. The claimant last worked for N. C. Lutheran Homes, Incorporated on March 17, 1982.From June 6, 1982 until June 12, 1982, the claimant has registered for work and continued toreport to an employment office of the Commission and has made a claim for benefits Inaccordance with G.S. 96-15(a) as of the time the Adjudicator issued a determination. Theemployer appealed the Adjudicator's determination, and an evidentiary hearing was held byCharles Monteith, Jr., Appeals Referee, under Docket No. XI-Ul-70079, who held that theclaimant was not disqualified for unemployment benefits. The employer filed a timely appeal tothe Commission. Pursuant to the employer's request, a Commission hearing to considerarguments on points of law was held on September 2, 1982. Appearing for the hearing were D.Russell Myers, Jr. and John B. Whidden, V, for the employer.

2. The claimant left this job of her own choice. She had been employed since July, 1980,as a restorative assistant. On March 17, 1982, she was injured on the job and became unable towork. She subsequently was placed on a medical leave of absence until released by her doctor toreturn to work. She was released by her doctor to return on June 2, 1982.

3. Between the claimant's last day of work on March 17, 1982 and June 2, 1982, anotherperson had been hired as restorative assistant, and the work she had done through March 17,1982 was not available for her. Pursuant to the employer's reasonable leave of absence policy,on June 2, 1982, she was offered the work it had available, on-call nurse assistant. This workwould have paid $3.74 per hour, it would have required her to work when needed, and it was nota permanent position. Pursuant' to the employer's unwritten policy, she would have had priorityfor any permanent work which would become available.

4. The claimant did not accept the employer's offer of continuing, available work becauseit was on-call, non-permanent, and paid $.81 less per hour (18%) than her former permanent,full-time work as restorative assistant had paid, $4.55 per hour. She, instead, filed a claim forunemployment insurance benefits.

5. When the claimant left the job, continuing work was available for the claimant there.

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IN RE SPRINGERPage Two of Three

MEMORANDUM OF LAW:

The Employment Security Law of North Carolina provides that an individual shall bedisqualified for benefits for the duration of his unemployment if it is determined by theCommission that such individual is unemployed because he left work voluntarily without goodcause attributable to the employer. G.S. 96-14(l).

An individual who voluntarily leaves work has the burden of showing good causeattributable to the employer for the voluntary leaving. Unless that burden is met, the individualis disqualified. In re Hodges, 49 N.C.App. 189, 270 S.E.2d 599 (1980); In re Vinson, 42N.C.App. 28, 255 S.E.2d 644 (1979).

In this case, the claimant has shown she voluntarily left due to a[n] 18% reduction in payand because of the change in work from permanent, full-time to non-permanent, on-call.Considering the provisions in G.S. 96-12(c) for partial weekly unemployment insurance benefits,the change in hours and duration is not good cause because a remedy exists in Chapter 96 of theGeneral Statutes, the Employment Security Law.

As to the reduction in pay, the undersigned concludes that 18% is a substantial decreaseand is good cause attributable to the employer for her voluntary leaving. Our Supreme Courthas held that a job which was offered to continue the employment relationship was unsuitablewhen it paid 28% less than the previous job and that good cause attributable to the employerexists for the voluntary leaving. In re Troutman, 264 N.C. 289, 141 S.E.2d 613 (1965). Inaccord, see Bunny's Waffle Shop v. Cal. Emp. Comm., 24 Cal.2d 735, 151 P.2d 224 (1944),where a 25% reduction was good cause; Maitland v. California, California Court of Appeals,First Dist., Div. Two No. 52896, March 3, 1982, wherein an 8% reduction was not good cause.

The Commission considers that a substantial reduction in pay can be good causeattributable to the employer under North Carolina law and that 15% or more generally issubstantial, provided the reduction was for reasons other than the claimant's causation. Ademotion due to malfeasance, misfeasance, or nonfeasance which results in a substantialreduction in pay only would be good cause attributable to the employer if the employer had actedarbitrarily or capriciously.

It is concluded the claimant did voluntary leave but with good cause attributable to theemployer and is not disqualified.

It is noted that had the claimant refused the same offer after a reasonable period, shemight have been subject to disqualification under G.S. 96-14(3) since after a reasonable period,the same work offered could become suitable.

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IN RE SPRINGERPage Three of Three

DECISION:

The claimant is not disqualified for unemployment benefits.

Commentary:

The Employment Security Law was subsequently amended to provide that good cause attributable tothe employer exists for leaving work if the employer unilaterally and permanently reduced a claimant'srate of pay more than 15% of the customary scheduled full-time work hours. Good cause does notexist if the reduction resulted from malfeasance, misfeasance or nonfeasance on the part of theclaimant. G.S. §96-14(1c).

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IN RE CLARK(Adopted March 11, 1983)

FINDINGS OF FACT:

1. The claimant last worked for this employer on June 11, 1982. From October 17, 1982until October 23, 1982, the claimant has registered for work and continued to report to anemployment office of the Commission and has made a claim for benefits in accordance with G.S.96-15(a) as of the time the Adjudicator issued a determination. The claimant appealed theAdjudicator's determination, and an evidentiary hearing was held by Charles M. Brown, Jr.,Appeals Referee, under Docket No. XIII-UI-78814, who held that the claimant was notdisqualified for unemployment benefits. The employer filed a timely appeal to the Commission.

2. The claimant was discharged from this job because he was unable to report to workdue to being incarcerated.

3. The claimant was convicted in Robeson County, North Carolina, of driving under theinfluence and driving while license permanently revoked. The claimant was sentenced to twelve(12) months in prison and served his sentence at the unit in Troy, North Carolina, which isapproximately two hundred (200) miles from the claimant's former place of employment. Theclaimant was released after having served four (4) months of his sentence. The claimant waseligible for work release during his incarceration.

4. The employer held the claimant's job open for a period of time in hopes that theclaimant would be transferred to a unit near the employer's place of business and could return towork on work release. The claimant was never transferred to a unit nearby his former place ofwork. The employer discharged the claimant and found a replacement for him, because theemployer could not hold the claimant's job open indefinitely.

MEMORANDUM OF LAW:

N.C.G.S. 96-14(2) provides that an individual shall be disqualified for benefits for theduration of the unemployment beginning with the first day of the first week after thedisqualifying act occurs with respect to which week an individual files a claim for benefits if it isdetermined by the Commission that such individual is, at the time such claim is filed,unemployed because the individual was discharged for misconduct connected with the work. Theterm "misconduct connected with work" is not a defined term in the Employment Security Lawof North Carolina; however, in the case of In re Collingsworth, 17 N.C.App. 340, 194 S.E.2d 210(1973), the North Carolina Court of Appeals quoted with approval the following definition:

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IN RE CLARKPage Two of Two

***[T]he term 'misconduct' (in connection with one's work) is limited toconduct evincing such wilful or wanton disregard of an employer's interestas is found in deliberate violations or disregard of standards of behaviorwhich the employer has the right to expect of his employee, or incarelessness or negligence of such degree or recurrence as to manifest equalculpability, wrongful intent or evil design, or to show an intentional andsubstantial disregard of the employer's interests or of the employee's dutiesand obligations to his employer.***

Yelverton v. Kemp Industries, 51 N.C.App. 215, 275 S.E.2d 553 (1981); IntercraftIndustries_Corporation v. Morrison, 305 N.C. 373, 289 S.E.2d 357 (1982).

It is concluded from the facts at hand that the claimant did evince an intentional andsubstantial disregard of his employer's interests by his conduct which caused him to beincarcerated and, therefore, unable to report for work. The North Carolina Court of Appeals inYelverton v. Kemp Furniture Industries 51 N.C.App. 215, 275 S.E.2d 553 (1981) stated that thedefinition approved in Collingsworth permits the Commission to find misconduct and to denybenefits for conduct showing an intentional and substantial disregard of the employer's interests.The employer in the case at hand had a substantial interest in making sure that its operation ransmoothly and was fully manned. The employer had no obligation to the claimant to keep theclaimant's job open indefinitely, particularly when the reason for the claimant's absence fromwork was due to his own legally inexcusable conduct. The claimant's conduct is clearly notwithin the conduct contemplated for the payment of benefits as described in G.S. 96-2, whichsets out the public policy underlying the Employment Security Law. That section provides inpart, that the funds collected under the Act are "to be used for the benefit of persons unemployedthrough no fault of their own." Since the claimant was discharged due to being absent from workwhile incarcerated following a conviction under the Motor Vehicle Laws of North Carolina, itcannot be said that the claimant became unemployed through no fault of his own. See Collins v.B & G Pie Company, Incorporated, ___ N.C. App. _____, 269 S.E.2d 809 (1982), disc. rev.denied, 299 S.E.2d 221 (1983), which upheld a disqualification of a claimant who wasdischarged for being absent from work while incarcerated due to a violation of conditions ofprobation.

The claimant must, therefore, be disqualified for benefits for having been discharged fromthe job for misconduct connected with the work.

DECISION:

The claimant is disqualified for unemployment benefits beginning October 17, 1982, andcontinuing until the claimant qualifies for benefits in accordance with the Employment SecurityLaw.

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IN RE BOONE(Adopted August 31, 1983)

FINDINGS OF FACT:

1. The claimant last worked for this employer on March 14, 1983. From March 20, 1983until March 26, 1983, the claimant has registered for work and continued to report to anemployment office of the Commission and has made a claim for benefits in accordance with G.S. 96-15(a) as of the time the Adjudicator issued a determination. The claimant appealed theAdjudicator's determination, and an evidentiary hearing was held by Jamie Creech, AppealsReferee, under Docket No. IX-UI-88153, who held that the claimant was not disqualified forunemployment benefits. The employer filed a timely appeal to the Commission.

2. The employer witness, a part owner, admitted to the Appeals Referee that the reasonprecipitating claimant's discharge or "the straw that broke the camel's back" was his discoverythat the claimant was looking for another job. Prior to this time, the employer had beendissatisfied with claimant's work performance during the last few weeks of his employmentbecause of claimant's mistakes in inventory, errors in daily bookkeeping, and his general attitudewhich reflected that he had lost interest in his job. During weekly staff meetings, these problemswere discussed with claimant and other managerial staff members. The employer had toconstantly go behind claimant to correct his errors and mistakes.

3. Claimant admitted that he had somewhat lost interest in his job because of the changeswhich had occurred, "both physical and staff wise." Claimant further admitted that he wasmaking mistakes and errors in the performance of his job duties.

MEMORANDUM OF LAW:

N.C.G.S. 96-14(2) provides that an individual shall be disqualified for benefits for theduration of the unemployment beginning with the first day of the first week after thedisqualifying act occurs with respect to which week an individual files a claim for benefits if it isdetermined by the Commission that such individual is, at the time such claim [is] filed,unemployed because the individual was discharged for misconduct connected with the work. Theterm "misconduct connected with work" is not a defined term in the Employment Security Lawof North Carolina; however, in the case of In re Collingsworth, 17 N.C.App. 340, 194 S.E.2d 210(1973), the North Carolina Court of Appeals quoted with approval the following definition:

***[T]he term 'misconduct' (in connection with one's work) is limited toconduct evincing such wilful or wanton disregard of an employer's interestas is found in deliberate violations or disregard of standards of behaviorwhich the employer has the right to expect of his employee, or in

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IN RE BOONEPage Two of Three

carelessness or negligence of such degree or recurrence as to manifest equalculpability, wrongful intent or evil design, or to show an intentional andsubstantial disregard of the employer's interests or of the employee's dutiesand obligations to his employer.***

The employer has the responsibility to show that the claimant for benefits was dischargedfor misconduct within the meaning of the law. Intercraft Industries Corporation v. Morrison, 305N.C. 373, 289 S.E.2d 357 (1982).

The Commission has consistently held that if it is alleged that a claimant was dischargedfrom his job for a series of incidents, the "totality of the circumstances" test as opposed to the"last incident" test will be utilized in determining whether he was discharged for misconductconnected with work. The "totality of the circumstances" test does not require that the lastincident occurring prior to the discharge be sufficient, in and of itself, to bring about thedischarge. Instead, the Commission will look at all the incidents as a whole in determiningwhether the claimant was guilty of misconduct. The employer, however, still must show that thelast incident precipitating the decision to discharge the claimant contained some element ofmisconduct. Conversely, the "last incident" test requires a showing that the final act or failure toact on the part of the claimant prior to the discharge was sufficient, in and of itself, to causeclaimant's discharge. This test is normally used when it is alleged that the claimant wasdischarged for only one reason. In the case under consideration, the employer has alleged thatclaimant was discharged due to unsatisfactory work performance, poor attitude toward his work,and seeking other employment while still employed. It appears that the appropriate test to applyto the facts of this case to determine whether misconduct connected with work existed is the"totality of the circumstances" test.

The employer has shown that the claimant had, in the last few weeks of his employment,failed to perform his job satisfactorily and had exhibited a poor attitude toward his work to suchan extent that his work performance suffered. The employer admitted, however, that the lastincident occurring and precipitating the discharge was claimant's search for other employment.But, there was no evidence presented by the employer that tended to prove that by seeking otherwork while employed, claimant violated or breached a term of his contract of employment or thatthe work search affected claimant's work performance. It must, therefore, be concluded that theevidence failed to establish that claimant's work search contained any element of misconduct.Applying the "totality of the circumstances" test to the facts and evidence of this case, it mustalso be concluded that the employer has not carried its burden of proving that claimant wasdischarged for misconduct connected with work since the last incident contained no element ofmisconduct.

The claimant is, therefore, not disqualified for benefits because the evidence fails to showthat the claimant was discharged from the job for misconduct connected with the work.

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IN RE BOONEPage Three of Three

The undersigned must note that since the last incident contained no element ofmisconduct, the employer could not have shown misconduct connected with work under the "lastincident" test. It is further noted that had the employer merely discharged the claimant due to hiswork performance and attitude toward his job, misconduct connected with work may have beenproven; however, the Commission must premise its decision upon all the reasons alleged for thedischarge from employment and not merely upon those reasons which would establishmisconduct.

DECISION:


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IN RE DALEY(Adopted September 14, 1983)

FINDINGS OF FACT:

1. The claimant last worked for the employer on December 13, 1982. From January 9,1983 until January 15, 1983, the claimant has registered for work and continued to report to anemployment office of the Commission and has made a claim for benefits in accordance with G.S.96-15(a) as of the time the Adjudicator issued a determination. The claimant appealed theAdjudicator's determination, and an evidentiary hearing was held by an Appeals Referee, underDocket No. IX-UI-84236, who held that the claimant was disqualified for unemploymentbenefits. The claimant filed a timely appeal to the Commission.

2. The claimant was discharged from his job as a registered nurse for two (2) separatereasons. The first reason was for alleged attendance at work on December 13, 1982 while underthe influence of an intoxicating substance. The second reason was claimant's failure to truthfullyrespond to the employer's inquiry concerning his hospitalization which caused him to be absentfrom work and unavailable to perform those duties for which he had been employed.

3. The employer witnesses had no firsthand, direct knowledge concerning claimant'sbeing at work on December 13, 1982 while under the influence of an intoxicating substance.Nor has claimant ever admitted to the employer that he was in such condition while at work onDecember 13, 1982, or any other day. Claimant denied this allegation of wrongdoing leveled bythe employer witnesses.

4. On December 13, 1982, claimant left his job prior to the end of his shift without firstrequesting permission from his immediate supervisor. The supervisor was able to contact theclaimant on the night of December 13, 1982 to set up an appointment for the morning ofDecember 14, 1982, to discuss the reason why the claimant had left the job without firstobtaining the supervisor's permission. Claimant,, however, was hospitalized on December 14,1982, due to an adverse reaction to his use of cocaine on December 8, 9 and 10, 1982. Thesupervisor was merely informed on the 14th by claimant's wife that claimant had beenhospitalized.

5. After his release from the hospital, claimant was scheduled for a conference with hissupervisor on December 23, 1982. At the December 23, 1982 conference, claimant told hissupervisor that he had been hospitalized due to anxiety and having pushed himself too hard.When requested by the supervisor to sign a release authorizing Forsyth Hospital to forward hismedical records to the employer for verification that the reason for his hospitalization was asstated by him, claimant admitted that his hospitalization had resulted from his adverse reaction to'some bad cocaine.' In response to questioning by the Appeals Referee, claimant admitted that he

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IN RE DALEYPage Two of Three

had initially lied to the supervisor as to the cause of his hospitalization, and he had done sobecause "I was afraid that if anything came up about the cocaine that I'll get fired, and I was justtrying to keep my job."

6. In his appeal to the Commission, claimant petitioned the Commission to admit, asadditional evidence to the record, excerpts from what was purportedly the High Point MemorialHospital, Incorporated Employee Handbook. These excerpts were in response to the employer'sallegation that claimant's lack of truthfulness was a violation of the employer's Code of Ethicsrequiring truthfulness in all aspects of employment. The written employer's Code of Ethics wasnot offered into evidence at the hearing before the Appeals Referee.

MEMORANDUM OF LAW:

N.C.G.S. 96-14(2) provides that an individual shall be disqualified for benefits for theduration of the unemployment beginning with the first day of the first week after thedisqualifying act occurs with respect to which week an individual files a claim for benefits if it isdetermined by the Commission that such individual is, at the time such claim is filed,unemployed because the individual was discharged for misconduct connected with the work. Theterm "misconduct connected with work" is not a defined term in the Employment Security Lawof North Carolina; however, in the case of' In re Collingsworth, 17 N.C.App. 340, 194 S.E.2d210 (1973), the North Carolina Court of appeals quoted with approval the following definition:

***[T]he term 'misconduct' (in connection with one's work) is limited toconduct evincing such wilful or wanton disregard of an employer's interestas is found in deliberate violations or disregard of standards of behaviorwhich the employer has the right to expect of his employee, or incarelessness or negligence of such degree or recurrence as to manifest equalculpability, wrongful intent or evil design, or to show an intentional andsubstantial disregard of the employers interests or of the employee's dutiesand obligations to his employer.***

Yelverton v. Kemp Industries, 51 N.C.App. 215, 275 S.E.2d 553 (1981); Intercraft IndustriesCorporation v. Morrison, 305 N.C. 373, 289 S.E.2d 357 (1982).

It is concluded from the facts at hand that the employer has failed to present sufficientevidence to carry its burden of proof of showing that the claimant while in attendance at work onDecember 13, 1982, was under the influence of an intoxicating substance. The employer,therefore, has not shown misconduct connected with work on the part of the claimant in regardsto this allegation.

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IN RE DALEYPage Three of Three

As to claimant's untruthfulness in response to his supervisor's initial inquiry as to thereason for his hospitalization, the employer has shown misconduct connected with work.Fabrication by an employee of an excuse for absence constitutes wilful misconduct. Dunlap v.Unemployment Compensation Board of Review, 366 A.2d 618 (1976). Indisputably, anemployee's deliberate lie or attempt to mislead his employer constitutes wilful misconduct.Walkowsky v. Board of Review, 432 A.2d 365 (1981); Smith v. Board of Review, 411 A.2d 712(1980); Glaser v. Board of Review, 404 A.2d 768 (1979). The employer has a right to expect anemployee to adhere to a standard of behavior which encompasses truthfulness in the employee'sresponses to inquiries made by the employer. Furthermore, an employee has a duty and/orobligation to the employer to deal with the employer in a truthful and trustworthy manner. Thisstandard of behavior or duty arises by virtue of the existence of the employer/employeerelationship. It is not necessary for the employer to have a written code of ethics wherein thisstandard of behavior or duty is specifically set out. A breach of the duty or standard of behaviorrequiring truthfulness in dealings with the employer constitutes misconduct connected with workwhen good cause for such breach does not exist.

The claimant in the present case breached the standard of behavior or duty of truthfulnessin his dealings with his employer. The only reason advanced by the claimant to justify his lack oftruthfulness was to avoid losing his job. It must be concluded that although such reason mayhave been a compelling one for the claimant, it does not amount to good cause or justification forhis act of untruthfulness.

The claimant was discharged from his job for misconduct connected with his work and,therefore, must be disqualified for unemployment insurance benefits pursuant to G.S. 96-14(2).

It is further concluded that since this decision does not rest upon the employer's Code ofEthics, the admission into evidence of the purported excerpts from the Employer's EmployeeHandbook as it relates to the Code of Ethics would serve no useful purpose. Claimant's petitionto the Commission to admit additional evidence, therefore, is denied.

DECISION:

The claimant is disqualified for unemployment benefits beginning January 9, 1983, andcontinuing until the claimant qualifies for benefits in accordance with the Employment SecurityLaw.

18



IN RE HENDRICK & HUMPHRIES(Adopted September 19, 1983)

This cause came on for consideration by the undersigned upon an appeal from decisionsrendered by the Appeals Referee. The undersigned, having reviewed the evidence in the record,does hereby vacate the decisions of the Appeals Referee and remand the cause for a new hearingand decision.

At the hearing before the Appeals Referee, the employer had 19 pieces of material that, ifspread out, would have covered an area at least the size of 12 bed sheets. These pieces of realevidence are important in this case. The issue before the Appeals Referee is whether or not theclaimants properly cut this material. It would appear from a review of the transcribed testimonythat a viewing of these 19 pieces of material laid out in order is necessary for a just determinationin this matter.

This order is in no way meant to imply criticism of the parties. The undersigned notesthat this would appear to be the first instance where he has seen or heard of evidence that was notpossible to display in the limited areas of the local office. The Appeals Referee should, however,have explored the possibility of laying out this material in the parking lot of the local office. Ifsuch was not feasible, other areas should have been explored such as the employer's place ofbusiness, an armory, an auditorium, etc.

The undersigned realizes that the Appeals Referee is not given an adequate amount oftime to handle this type of evidence during a normal scheduled hearing. On those rare occasions,when such problems as this occur, the Appeals Referee should continue the matter for a time andplace certain, if possible. If not possible to set a time and place certain, the Appeals Refereeshould continue the matter until he can make further arrangements and then notify the parties.

In this case, the Appeals Referee should arrange to have the real evidence displayed inthe parking lot of the local office or some other available area. The Appeals Referee should viewthe 19 pieces of cloth and describe into the record as best he can what he observes. The employerwitnesses and the claimant[s] should be given an opportunity to review his description and addany comments that they desire concerning his description and his observations.

"When real evidence (i.e., the object itself) is offered into evidence, it must be properlyidentified and offered." 6 N.C. Index 3d, Evidence section 26. A review of the record seemed toindicate that the 19 pieces of cloth were offered, but the offered evidence was never ruled uponperhaps because of their nature. The Appeals Referee who acts as both judge and jury and is thetrier of fact must make findings of fact based upon competent evidence. Anderson vs.Northwestern Motor Company, 233 N.C. 372, 64 S.E.2d 265 (1951); Moses vs. Bartholomew,238 N.C. 714, 78 S.9.2d 923 (1953).

19

IN RE HENDRICKS & HUMPHRIESPage Two of Two

In many cases, he is called upon to do this by determining the credibility of the witnesseswithout the benefit of any real evidence. Here, where there is real evidence available, it is mostimportant that it be accepted and used. An extraordinary amount of time should be scheduled forthis hearing so that all parties will have an ample opportunity to conduct and complete thismatter.

20



IN RE BUCHANAN(Adopted December 8, 1983)

FINDINGS OF FACT:

1. The claimant last worked for the employer on May 31, 1983. From June 5, 1983 untilJune 11, 1983, the claimant has registered for work and continued to report to an employmentoffice of the Commission and has made a claim for benefits in accordance with G.S. 96-15(a) asof the time the Adjudicator issued a determination. The employer appealed the Adjudicator'sdetermination, and an evidentiary hearing was held by Louis J. Ferris, Jr., Appeals Referee,under Docket No. XIV-UI-92954, who held that the claimant was not disqualified forunemployment benefits. The employer filed a timely appeal to the Commission.

2. Claimant was discharged from this job for excessive absenteeism and tardinesspursuant to the employer's progressive disciplinary warnings procedure. The progressivedisciplinary warning procedure included: a verbal warning, a first written warning, a secondwritten warning, and a final warning which resulted in termination of employment. Claimant waswell aware of the employer's policy as to absenteeism and tardiness to work. The disciplinarywarning procedure was also known to the claimant. Both items were discussed with the claimantwhen she was re-hired by the employer on August 2, 1982.

3. The verbal warning was issued to the claimant on November 10, 1982, for accruingthree (3) instances of absence in a one (1) month period. After accruing five (5) additionalinstances of absence for a total of nine (9) instances in a six (6) months period, claimant wasissued her first written warning on March 16, 1983. The second written warning was issued onMay 10 for eight (8) instances of tardiness in a six (6) months period. At the time the secondwritten warning was issued, claimant was also suspended from work for a three (3) day periodwhich ended on May 16. As it had in the March 16th warning, the employer requested thatclaimant improve her attendance record in order to avoid further disciplinary action. The finalwarning was issued on May 31, 1983 for claimant's absence from work on that date. Consistentwith the employer's progressive disciplinary warning procedure, claimant was discharged fromher job upon the receipt of the fourth warning.

4. From August 2, 1982 through May 31, 1983, claimant gave the following reasons forher absences and/or tardiness: personal illness, personal business, husband's aunt died, appearingin court with husband, dental appointment, extraction of tooth, weather, illness of grandmother,stepfather died, desire to be with parents, unspecified personal reasons, and lack of child care.

5. Claimant's absence from work on May 31, 1983 was occasioned by lack of child care.Her regular babysitter had informed claimant on the afternoon of May 30th that she could nolonger take care of the claimant's child. Claimant made efforts to locate appropriate child carebut was unable to do so in time to permit her to report to work on May 31st. Claimant's child was

21

IN RE BUCHANANPage Two of Five

nineteen (19) months of age and could not be left alone. The employer was duly informed of thereason for claimant's absence on May 31st. Claimant located a babysitter on May 31st and wasable to return to work on June 1st; however, she had been discharged. The employer presentedno evidence tending to show that the claimant could have located child care on May 30th whichwould have permitted her to report to work on May 31st.

MEMORANDUM OF LAW:

N.C.G.S. 96-14(2) provides that an individual shall be disqualified for benefits for theduration of the unemployment beginning with the first day of the first week after thedisqualifying act occurs with respect to which week an individual files a claim for benefits if it isdetermined by the Commission that such individual is, at the time such claim is filed,unemployed because the individual was discharged for misconduct connected with the work. Theterm "misconduct connected with work" is not a defined term in the Employment Security Lawof North Carolina; however, in the case of In re Collingsworth, 17 N.C. App. 340, 194 S.E.2d210 (1973), the North Carolina Court of Appeals quoted with approval the following definition:

***[T]he term 'misconduct' in connection with one's work) is limited toconduct evincing such wilful or wanton disregard of an employer's interestas is found in deliberate violations or disregard of standards of behaviorwhich the employer has the right to expect of his employee, or incarelessness or negligence of such degree or recurrence as to manifest equalculpability, wrongful intent or evil design, or to show an intentional andsubstantial disregard of the employer's interests or of the employee's dutiesand obligations to his employer.***

The employer has the responsibility to show that the claimant for benefits was dischargedfor misconduct within the meaning of the law. Intercraft Industries_Corporation v. Morrison, 305N.C. 373, 289 S.E.2d 357 (1982).

The question presented by this appeal is whether claimant's absence from work on May31, 1983, which violated her employer's rule on absenteeism and placed her in non-compliancewith the employer's May 10, 1983 request and which was due to her inability to secure childcare, constituted "misconduct" connected with her work so as to disqualify her forunemployment compensation benefits pursuant to G.S. 96-14(2).

The North Carolina Court of Appeals in In re Cantrell, 44 N.C.App. 718, 720, 263 S.E.2d1, 3 (1980), quoted with approval the following language from McLean v. Board of Review, 476PA. 617, 620, 383 A.2d 533, 535 (1978):

22

IN RE BUCHANANPage Three of Five

We must evaluate both the reasonableness of the employer's request in thelight of all the circumstances, and the employee's reason for noncompliance.The employee's behavior cannot fall within "wilful misconduct" if it wasjustifiable or reasonable under the circumstances, since it cannot then beconsidered to be in wilful disregard of conduct the employer "has a right toexpect." In other words, if there was "good cause" for the employee's action,it cannot be charged as wilful misconduct. (Citations omitted).

In Cantrell, the employer had instructed the employee to make a long trip with anotherdriver who was black. This employee refused to do so due to personal reasons and hisunsubstantiated belief that the employer's rotation system established for determining a team ofdrivers was no longer in effect. Claimant continued to refuse to comply with his employer'srequest even after again being directed to comply with the request. The court held that aclaimant['s] deliberate and unjustifiable refusal to report to work, when the employer has theright to insist on the employee's presen[ce] and when the employee knows that his refusal wouldcause logistic[al] problems for the employer, constitute misconduct sufficient to disqualify theclaimant from receiving benefits. It is clear that the Court found the employer's request to bereasonable and the employee's noncompliance with this request to be without good cause.

In 1982, the North Carolina Supreme Court in Intercraft Industries Corporation v.Morrison, supra, stated:

Our research discloses that it is generally recognized that chronic orpersistent absenteeism, in the face of warnings, and without good cause mayconstitute wilful misconduct. (Citations omitted.) However, a violation of awork rule is not wilful misconduct if the evidence shows that theemployee's actions were reasonable and were taken with good cause.(Citations omitted.) This court has defined "good cause" to be a reasonwhich would be deemed by reasonable men and women valid and notindicative of an unwillingness to work. In re Watson, 273 N.C. 629, 161S.E.2d 1 (1968); see also, In re Clark, 47 N.C.App. 163, 266, S.E.2d 854(1980).

In Intercraft, the Court held that it was proper for the Commission as the trier of fact to find thatthe employee had, when she presented uncontroverted evidence tending to show that she couldnot locate appropriate child care, established good cause for failure to report to work althoughpursuant to the employer's rule concerning absenteeism she accrued her tenth unexcused absenceand was subject to discharge. The Court went on to state that had the employer, to whom theCommission had allotted the burden of showing misconduct connected with work, offered anyevidence to negate claimant's evidence of "good cause", the Commission would have beenrequired to consider that evidence and make a specific finding as to whether "good cause"existed for the employee's violation of the employer's rule on absenteeism.

23

IN RE BUCHANANPage Four of Five

Citing Intercraft,_supra, as support, the Court in Butler v. J.P. Stevens Company,Incorporated and Employment Security Commission, 60 N.C.App. 563, 566, 299 S.E.2d 672,675 (1983) held:

This definition of "misconduct" (as cited in Collingsworth, supra) sufficesto encompass an employee's violation of the employer's reasonableattendance rules of which he has notice and his failure to give the employerproper notice of absences for which good cause may exist. (Emphasisadded.)

The employee in Butler was discharged from his job for violating a company ruleprohibiting the accruing of four (4) unexcused absences within a six months period. The fourthunexcused absence occurred when the claimant failed to properly notify of his absence whichwas occasioned by illness. The court was of the opinion that the reason for claimant's absenceconstituted good cause for said absence; however, both the Court and the Commission found thatthe employee had not established good cause or justification for his failure to notify the employerconcerning his absence.

The common thread running through the above-cited cases is that the Commission shouldconsider in its determination of whether the employee was discharged for misconduct, anyevidence presented by the parties which tends to show the presence or absence of good cause orjustification for the employee's violation of a reasonable employer's rule or failure to complywith a reasonable employer's request (instructions). It is also clear from the language of thesecases that it is incumbent upon the employee to present some evidence which would amount to"good cause" for violating or failing to comply with a known employer's reasonable rule orrequest. Once the employee has presented such evidence, the employer must, in order to carry itsburden of establishing "misconduct," offer some evidence to negate the employee's showing of"good cause." If either of the parties fail in its responsibility, the conclusion as to the existence of"misconduct" should be made accordingly.

In the case at hand, the employer's progressive disciplinary warning procedure wassufficient to place claimant on notice that her attendance was poor and was unacceptable by theemployer. Furthermore, the employer's May 10, 1983 request and final warning that claimantmust improve her attendance to avoid further disciplinary action was definitely reasonable inlight of the prior warning, both oral and written, and the suspension from work resulting fromclaimant's pattern of tardiness and absences. In addition, it is clear from the record evidence andthe facts found therefrom that none of claimant's reasons for tardiness and some of her reasonsfor absences occurring prior to May 31 did not justify said tardies and absences.

24

IN RE BUCHANANPage Five of Five

Within fifteen (15) calendar days after returning from her three (3) day suspension fromwork, claimant was again absent from work. As did the employee in Intercraft, supra, claimantpresented uncontroverted evidence in an effort to establish "good cause" for her May 31 absenceof which the employer was properly notified. It is a valid assumption that problems in arrangingalternative child care could arise as a result of a regular babysitter's short notice to the claimantthat she would no longer be available to provide care to claimant's nineteen (19) months oldchild while claimant was at work. It was not indicative of an "unwillingness to work" whenclaimant, unable to arrange alternative child care, chose not to leave her young child unattendedwhile she reported to work on May 31st. Claimant's immediate return to work on June 1, 1983after being successful on May 31 in arranging appropriate child care, did not reflect anunwillingness to work. Claimant's actions, under the existing circumstance, were those of areasonable and prudent person and therefore, established good cause for her absence on May 31,1983.

The employer presented no evidence tending to show that the reason advanced byclaimant for her absence was untrue or that there was alternative child care available whichwould have permitted claimant to report to work on May 31 or that claimant did not conduct herchild care search as a reasonable and prudent person would have and as a result child care wasnot obtained in sufficient time for claimant to report to work as scheduled. In essence, theemployer failed to rebut or negate claimant's showing of good cause.

Pursuant to the principles established in Cantrell, Intercraft and Butler, as discussedsupra, it must be concluded that the employer did not carry its burden of showing that claimantwas discharged from work due to misconduct. The claimant is, therefore, not disqualified forbenefits because the evidence fails to show that the claimant was discharged from the job formisconduct connected with the work.

DECISION:


25



IN RE DAVIS(Adopted February 2, 1984)

FINDINGS OF FACT:

1. The claimant last worked on May 25, 1983 as a substitute teacher for the County Boardof Education. There was no further work available for the claimant at that time. From May 22,1983 until July 2, 1983, the claimant has registered for work and continued to report to anemployment office of the Commission and has made a claim for benefits in accordance with G.S.96-15(a) as of the time the Adjudicator issued a determination. The claimant appealed theAdjudicator's determination, and an evidentiary hearing was held by Pat Barnes, AppealsReferee, under Docket No. IV-UI-93821, who held that the claimant was ineligible to receiveunemployment benefits. The claimant filed a timely appeal to the Commission.

2. The claimant worked as a teacher for this employing unit until 1977. From 1977 untilJune of 1982, the claimant performed services for a college.

3. From November of 1982 until May of 1983, the claimant worked as a substituteteacher for both the County Board of Education and a private school. The claimant performedduties as a substitute teacher for one to six days for the County Board of Education. The claimantperformed duties as a substitute teacher for the private school for one to six days during theschool year of 1982-83.

4. The claimant's status as a substitute teacher with the private school is unknown.

5. The claimant's status with the County Board of Education is active, The claimant'sname currently appears on a list of approved teachers for the 1983-84 school year. It is unknownwhether or not the claimant will be called upon to provide substitute teaching services at thistime. The claimant's chances for obtaining such employment are the same as many otherindividuals whose names appeared on such approved list. Those individuals will be called uponif and when they are needed to provide services as substitute teachers.

6. The claimant filed a new initial claim in January of 1983. He filed his additional initialclaim effective May 22, 1983.

MEMORANDUM OF LAW:

The Employment Security Law of North Carolina provides that an unemployedindividual shall be eligible to receive benefits with respect to any week only if the Commissionfinds that he is available for work. G.S. 96-13(a)(3).

26

IN RE DAVISPage Two of Two

The law further provides that the payment of benefits to any individual based on servicesfor secondary schools, or subdivisions of said secondary schools, subject to this chapter, oradministered under the provisions of this chapter, shall be in the same manner and under thesame conditions of the law of the chapter as applied to individuals whose benefit rights are basedon other services subject to this chapter.

The law further provides that any employee of a secondary school system shall beconsidered available for work during any week such individual is on vacation betweensuccessive academic years only if the individual does not have a contract, written, oral, orimplied, or a reasonable assurance to perform services in any capacity for the secondary schoolsystem for both such academic years. The provisions of this subsection relating to the denial ofbenefits apply to individuals who perform services on a part-time or substitute basis. G.S. 96-13(b)(2).

Based upon the foregoing facts, it is concluded that the claimant did provide substituteteaching services during the 1982-83 school year for the County Board of Education and aprivate college. Such services were limited to no more than twelve days during the 1982-83school year.

The claimant is on an approved list of substitute teachers to perform duties as a substituteteacher for the 1983-84 school year. The claimant is subject to be called if and when work isavailable during the 1983-84 school year.

The claimant last worked for the County Board of Education. While the claimant may ormay not be eligible for benefits during the academic year, the claimant is clearly not eligible forbenefits during the summer vacation period. The law is specific and no exceptions are provided.

Consequently, the claimant is not available for work within the meaning of the lawduring the week beginning May 22, 1983. The claimant is, therefore, not eligible to receivebenefits for those weeks.

DECISION:

The claimant is not eligible to receive unemployment benefits for the week beginningMay 22, 1983.

27



IN RE LEE(Adopted April 17, 1984)

This cause came on for consideration on the 29th day of March, 1984, by the undersignedupon an appeal from the decision rendered by Appeals Referee, Albert Jerome Williams, Jr.When this matter came on for argument, the following person(s) appeared representing theirrespective interests: John Doe, representative for employer.

In this matter, the employer has alleged that a prospective witness was intimidated by theclaimant and would not appear before the Appeals Referee because of threats made by him toher. The claimant admits saying to her "I'll make sure . . . I won't forget this, I'm going to keepmy eye on you" and "I'll be watching you" when informed by her that she was going to reporthim for sleeping. The undersigned concludes that there is a reasonable basis to support theemployer's allegation that its witness was intimidated.

It is the policy of this Commission that reasonable measures will be taken to protect andensure that any witness can be able to testify before the Commission without fear or subject tointimidation. To that end, the Appeals Referee assigned to a case shall take whatever reasonablesteps are necessary to ensure such testimony in the event there is a reasonable basis to believeintimidation or threats have occurred. In most cases, the simplest measure is to arrange for atelephone hearing. This decision is therefore vacated and the matter is remanded for a telephonehearing.

It is now, therefore, ordered that the undersigned, having reviewed the evidence in therecord, does hereby vacate the decision of the Appeals Referee and remand the cause for atelephone hearing and decision.

28



IN RE TAYLOR(Adopted May 15, 1984)

FINDINGS OF FACT:

1. The claimant last worked for the employer on May 31, 1983. From November 13,1983 until November 19, 1983, the claimant has registered for work and continued to report to anemployment office of the Commission and has made a claim for benefits in accordance with G.S.96-15(a) as of the time the Adjudicator issued a determination. The claimant appealed theAdjudicator's determination, and an evidentiary hearing was held by John F. Pendergrass,Appeals Referee, under Docket No. IX-Ul-734, who held that the claimant was disqualified forunemployment benefits. The claimant filed a timely appeal to the Commission.

2. The claimant was initially employed as a cloth layer and worked approximately 40hours per week.

3. Due to economic reasons, the claimant's hours were gradually reduced to around 25hours per week.

4. The claimant believed that his financial condition did not make it feasible for him towork that number of hours. The claimant resigned his position in order to go into business forhimself. At the time of the hearing, the claimant had not performed any services in his privatebusiness as a carpenter for several months.

5. The claimant could have supplemented his hours by performing other duties with theemployer on a band lathe but failed to do so because he felt that job was not possible for him toperform because of his "nerves."

6. When the claimant left the job, continuing work was available for the claimant there.

MEMORANDUM OF LAW:


In this case, the record evidence and facts found therefrom do not support a conclusionthat the claimant has met the burden of showing good cause attributable to the employer for thevoluntary leaving. In re Hodges, 49 N.C.App. 189, 270 S.E.2d 599 (1980); In re Vinson, 42N.C.App. 28, 255 S.E.2d 644 (1979).

29

IN RE TAYLORPage Two of Two

A claimant's dissatisfaction with a reduction in working hours and the financial difficultyresulting from such a reduction does not constitute a reason, necessitous and compelling enoughto justify his voluntary leaving. Owen v. Board of Review, 26 Pa. Cmwlth. 278, 363 A2d 852(1976).

Where a claimant who traveled 60 miles round trip to and from work daily quit her jobafter the employer reduced her hours from 36 to 20 per week, she was subject to disqualificationfor terminating her employment without good cause notwithstanding her contention that she wasno longer able to afford to travel the distance because of the reduction in hours and pay. The factthat she accepted a job a considerable distance from home did not constitute cause "attributableto the employer." Begay, N.M. Sup. Ct., CCH, N.M., par. 8211 (1984).

The Employment Security Law provides that an individual who is working less than threecustomary, scheduled, full-time days is eligible for partial unemployment benefits. N.C.G.S. 96-8(10); N.C.G.S. 96-12(c).

In enacting these statutes, the legislature has set forth the amount of reduced employmentan individual would have to suffer prior to obtaining partial unemployment insurance benefits,

The claimant had ample opportunity to seek other employment or to attempt to performhis self-employment during his reduced hours. Resignation without prospects of other full-timeemployment or a strong prospect of sufficient income from self-employment is not the conductof a reasonable and prudent person.


DECISION:

The claimant is disqualified for unemployment benefits beginning November 13, 1983,and continuing until the claimant qualifies for benefits in accordance with the EmploymentSecurity Law.

Commentary:

The Employment Security Law was subsequently amended to provide that good cause attributable tothe employer exists for leaving work if the employer unilaterally and permanently reduced a claimant'swork hours more than 20% of the customary scheduled full-time work hours. Good cause does notexist if the reduction resulted from malfeasance, misfeasance or nonfeasance on the part of theclaimant. G.S. §96-14(1b).

30



IN RE SCHOFIELD(Adopted May 15, 1984)

FINDINGS OF FACT:

1. The claimant last worked for the employer on December 23, 1983. From January 15,1984 until January 21, 1984, the claimant has registered for work and continued to report to anemployment office of the Commission and has made a claim for benefits in accordance with G.S.96-15(a) as of the time the Adjudicator issued a determination. The claimant appealed theAdjudicator's determination, and an evidentiary hearing was held by Jo Ann Weaver, AppealsReferee, under Docket No. II-UI-3475, who held that the claimant was not disqualified forunemployment benefits. The employer filed a timely appeal to the Commission.

2. On or about December 20, 1983, the claimant mailed a letter of resignation to thepresident of the employer who was located in Port Orange, Florida. The letter was mailed fromthe claimant's place of work in Goldsboro, North Carolina.

3. On December 22, 1983, claimant had a conversation with the president during whichthe matter that caused claimant's resignation was settled. Specifically, claimant disagreed withthe new policy on commissions (effective January 1, 1984) that would have replaced the oldpolicy of paying branch managers 2% of sales. The new policy was modified to eliminateclaimant's objections to it. The modified policy provided that effective January 1, 1984,claimant was to be paid a minimum of 2% of sales or 25% of the net profit, whichever wasgreater.

4. Claimant expressed satisfaction with the compromised arrangement. Under thismodification of the new commission policy, claimant would not have received less money thanwhat he had received during the period that only the 2% commission on sales policy wasapplicable. Claimant's weekly salary of $500 was not affected by either the new or compromisedpolicy change.

5. During the December 22nd telephone conversation, claimant did not inform thepresident that he had written and/or mailed his letter of resignation on December 20th. Further,claimant at no time during the conversation informed the president that he no longer desired forhis resignation to be accepted by the employer. Claimant was of the opinion that the presidentreceived his letter of resignation on December 23rd.

6. By Western Union telex (dated December 23rd), the president advised the individualwho had been named acting branch manager that the claimant had tendered his resignation andthat such resignation had been accepted by the employer. The acting manager was instructed toinform the claimant of the acceptance and the desire that he vacate the premises immediately.The acting manager complied with these instructions.

31

IN RE SCHOFIELDPage Two of Three

7. At the time claimant submitted his resignation, he was a branch manager receiving aweekly salary of $500.00. On a monthly basis, he was paid 2% commission on sales.

8. Claimant's resignation was to be effective January 13, 1984. The employer, however,accepted claimant's resignation effective December 23rd, approximately three weeks prior to thedate set by claimant. Claimant's resignation was accepted prior to January 13th because certainstatements contained in claimant's letter of resignation failed to assure the employer thatclaimant, as branch manager, would act in the best interest of the employer during the noticeperiod.

9. As a result of his separation from employment, claimant was paid $1,975.00 foraccrued vacation and sick leave. Such payment was equivalent to approximately four weeks ofsalary or wages at the rate of $500.00 per week.

MEMORANDUM OF LAW:

The Employment Security Law of North Carolina provides that an individual-shall bedisqualified for benefits for the duration of his unemployment if it is determined by theCommission that such individual is unemployed because he left work voluntarily without goodcause attributable to the employer. G.S. 96-14(l).

N.C.G.S. 96-14(2) provides that an individual shall be disqualified for benefits for theduration of the unemployment beginning with the first day of the first week after thedisqualifying act occurs with respect to which week an individual files a claim for benefits if it isdetermined by the Commission that such individual is, at the time such claim is filed,unemployed because the individual was discharged for misconduct connected with the work.G.S. 96-14(2).

The Employment Security Law further provides that no individual shall be consideredunemployed if, with respect to the entire calendar week, he is receiving, has received, or willreceive as a result of his separation from employment, remuneration in the form of accruedvacation, terminal leave pay, or wages by whatever name. G.S. 96-8(10)c.

In the case at hand, claimant, on December 20, 1983,.mailed a letter of resignation to thecompany president who was located in Florida. During a telephone conversation with thecompany president on December 22nd, claimant reached a satisfactory resolution as to the matterwhich had caused him to formulate and mail the resignation. Claimant, however, neitherinformed the company president that he had written or forwarded a letter of resignation nor thathe wished or desired to withdraw his resignation. A reasonable person, under similarcircumstances and desirous of continuing in employment, would have, at the minimum, made theemployer aware of the resignation and that he no longer desired for it to be accepted.

aflanagan

Highlight

aflanagan

Sticky Note

Huge point for Lee & Dawson!!

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IN RE SCHOFIELDPage Three of Three

The record is absent any evidence to the effect that claimant did not have the opportunityto discuss his resignation with the company president on December 22nd. Under thecircumstances, the employer acted properly in accepting claimant's resignation and, in theabsence of any evidence that claimant conveyed to the employer that he did not intend for hisresignation to be accepted, it is found that it was the intent of the claimant to quit his job at thetime the resignation was received and accepted by the employer. The employer neitherrequested nor coerced claimant to submit his resignation; consequently, it was a voluntaryresignation and not an involuntary one which would constitute a discharge.

The record evidence clearly reveals that the payment of accrued vacation and sick leaveto claimant was made as a result of his separation from employment The accrued vacation andsick leave pay covered claimant's weekly salary for at least 3 weeks after he submitted hisresignation, the same number of weeks which was contained in his notice. It is found thatalthough claimant did not actually perform work, he was paid remuneration or wages for hisentire notice period in the form of accrued vacation and sick leave pay and, therefore, was stillemployed within the meaning of the law. Since claimant did not become unemployed until afterhis notice period had expired, it cannot be said that claimant became unemployed because hisemployer refused to allow him to work his notice.

The remaining question is whether claimant had good cause attributable to the employerfor voluntarily leaving his job. At the time claimant posted his letter of resignation, he may havehad good cause for terminating his own employment. After reaching a satisfactory compromiseas to the policy on commissions, claimant's reason for allowing his resignation to stand was not"a reason for rejecting work that would be deemed by reasonable men and women as valid andnot indicative of an unwillingness to work." Sellers v. National Spinning Co., Inc. and ESC, 614N.C.App. 567, 307 S.E.2d 774, dis. rev. denied, 309 N.C. 464 (1983). The record evidence andfacts found therefrom do not support a conclusion that the claimant has met the burden ofshowing good cause attributable to the employer for the voluntary leaving. In re Hodges, 49N.C.App. 189, 270 S.E.2d 599 (1980); In re Vinson, 42 N.C.App. 28, 255 S.E.2d 644 (1979).


DECISION:

The claimant is disqualified for unemployment benefits beginning January 15, 1984, andcontinuing until the claimant qualifies for benefits in accordance with the Employment SecurityLaw.

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33



IN RE GORDON(Adopted July 17, 1984)

FINDINGS OF FACT:

1. The claimant last worked for the employer on January 26, 1984. From February 19,1984 until February 25, 1984, the claimant has registered for work and continued to report to anemployment office of the Commission and has made a claim for benefits in accordance with G.S.96-15(a) as of the time the Adjudicator issued a determination. The claimant appealed theAdjudicator's determination, and an evidentiary hearing was held by Jo Ann Weaver, AppealsReferee, under Docket No. II-UI-5253 JTPA, who held that the claimant was disqualified forunemployment benefits. The claimant filed a timely appeal to the Commission.

2. The claimant met with an Employment Interviewer in the Greenville Local Job ServiceOffice on or about February 23, 1984. Claimant was enrolled in a Job Training Partnership ActDislocated Workers Program.

3. During the conference, claimant was informed of the program class sessions scheduledto begin the following week and asked whether she could attend them. The classes were to beconducted from 2:00 p.m. to 5:00 p.m. The interviewer was unable to answer claimant'squestions as to whether the attendance at these classes was mandatory and whether non-attendance would have any affect on her receipt of unemployment insurance benefits.

4. The claimant made the interviewer aware that it would be difficult for her to attend aclass session lasting from 2:00 to 5:00. She gave two (2) reasons for this position: (a) the lengthof the sessions, and (b) problems with child care for her grandchildren.

5. Claimant did not attend the JTPA class sessions and the matter was referred foradjudication.

MEMORANDUM OF'LAW:

The Job Training Partnership Act (hereinafter JTPA) was enacted in October 1982. Thepurpose of the Act is

. . . to establish programs to prepare youth and unskilled adults for entryinto the labor force and to afford job training to those economicallydisadvantaged individuals and other individuals facing serious barriers toemployment, who are in special need of such training to obtain productiveemployment. 29 U.S.C.A., Sec. 1501.

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IN RE GORDONPage Two of Three

Under Subchapter II of this Act - Employment and Training Assistance for DislocatedWorkers - the U.S. Secretary of Labor is authorized and required to make available (to stateagencies) certain designated funds "for the purpose of providing training, retraining, job searchsearch assistance, placement . . . to individuals who are affected by mass layoffs . . . or whoreside in areas of high unemployment . . . . " 29 U.S.C.A., Sec. 1651(c). (Emphasis added).

Federal law (26 U.S.C.A., Sec. 3304(a)(8)) provides that a claimant shall not be deniedunemployment insurance compensation based upon availability for work, active search for work,or refusal to accept work, when he/she is participating in training which has been approved by astate employment service agency. Under JTPA (29 U.S.C.A., Sec. 1652(d)), a claimant'sacceptance of training pursuant to a JTPA plan is deemed to be acceptance of training with theapproval of the state agency within the meaning of any provision of federal law (or consistentstate law) relating to unemployment benefits.

The Commission's approval of training for a specific claimant carries with it adetermination that (1) reasonable employment opportunities for which the claimant is fitted bytraining and experience do not exist in the locality or are severely curtailed, (2) the trainingrelates to an occupation or skill for which there are expected to be reasonable opportunities foremployment, and (3) the claimant has the required qualification and the aptitude to successfullycomplete the training course.

Under N.C.G.S. 96-13(a)(3), a claimant attending a vocational school or training programthat has been approved by the Commission is not required to actually meet the benefit eligibilityconditions of being available for work, actively seeking work and accepting an offer of suitablework. Such individual is deemed to be available for work within the meaning of the law.

Statutorily, participation in Commission approved training is the only situation in which aclaimant for unemployment insurance benefits is specifically exempted from the requirements ofbeing available for work, actively seeking work and accepting an offer of suitable work. ESCRegulation No. 10.25 sets forth the only other situations where suspension of benefit eligibilityconditions may apply - temporary layoffs and exhaustion of all potential opportunities forsuitable work. However, the full exemption or suspension applicable to individuals inCommission approved training is not applicable to claimants-in 'these particular situations.

JTPA did not usurp state law governing a claimant's eligibility or qualification to receiveunemployment compensation when he/she has failed to comply with the guidelines of theapproved training program. A claimant's failure to adhere to the guidelines made known tohim/her could result in the loss of his/her exemption and/or an imposition of an indefinitedisqualification for unemployment insurance benefits. G.S. 96-14(4) provides that an individualshall be indefinitely disqualified from receiving unemployment insurance benefits if theCommission determines that

a. Such individual has failed without good cause to attend a vocationalschool or training program when so directed by the Commission (Emphasisadded);

35

IN RE GORDONPage Three of Three

b. Such individual has discontinued his training course without good cause;or

c. If the individual is separated from his training course or vocationalschool due to misconduct.

It is clear from the foregoing discussion that the treatment of claimants participating inCommission approved training programs is extraordinary. Consequently, Commission personnelmust strictly comply with the procedure for awarding exemptions and specifically make theclaimant aware of what is required when he/she enrolls in a training program.

Sections of the N.C. Employment Security Law imposing disqualification for benefitsmust be strictly construed in favor of the claimant and should not be enlarged by implication. Inre Watson, 273 N.C. 629, 161 S.E.2d 1 (1968); In re Scaringelli, 39 N.C.App. 648, 251 S.E.2d728 (1979). Ergo, if a claimant is to be disqualified for failure to attend a training program, itmust be first shown that he/she was directed by the Commission to attend the program."(D)irected" is not defined within Chapter 96 but the plain meaning derived from its usagewithin subsection 96-14(4) is "ordered; commanded; instructed".

In the present case, during a conference with claimant on or about February 23, 1984, aCommission interviewer enrolled claimant in a JTPA Dislocated Workers Program that pursuantto federal law constituted claimant's acceptance of a training program approved by theCommission. As a part of this program, class sessions for program participants were to beconducted the following week. The interviewer did not, at any time during this conference,"direct, order, command, or instruct" claimant to attend said sessions. Claimant was informed ofthese sessions in such language as to cause a reasonable person to believe that attendance wasoptional. Further, the interviewer expressed a lack of knowledge as to whether non-attendancewould adversely affect claimant's receipt of unemployment insurance benefits; therefore, itcannot be said that claimant should have known that she was being directed to attend the classsessions or possibly be subject to a disqualification for benefits for failure, without good cause,to attend.

The undersigned has no alternative but to find that claimant has not failed "to attend . . . .a training program when so directed by the Commission." Since no showing has been made thatclaimant was even directed to attend a training program as required by G.S. 96-14(4)a, theundersigned does not find it necessary to reach the issue of whether claimant had good cause fornon-attendance.

It is, therefore, concluded that claimant is not disqualified from receiving benefitsbecause the evidence fails to prove that claimant failed to attend a training program when sodirected by the Commission.

36



IN RE VAUGHN(Adopted August 18, 1984)

FINDINGS OF FACT:

1. The claimant last worked for the employer on April 3, 1984. From April 1, 1984 untilApril 7, 1984, the claimant has registered for work and continued to report to an employmentoffice of the Commission and has made a claim for benefits in accordance with G.S. 96-15(a) asof the time the Adjudicator issued a determination. The claimant appealed the Adjudicator'sdetermination, and an evidentiary hearing was held by Mitchell A. Wolf, Appeals Referee, underDocket No. V-UI-7331, who held that the claimant was not disqualified for unemploymentbenefits. The employer filed a timely appeal to the Commission.

2. Claimant quit her job. She was not discharged by the above-named employer.

3. On claimant's last day of work, she was given the option of either performing the workrequested of her by the employer or leaving the job. The work requested of claimant was withinher job description as a dental technician. Further, claimant could have performed the tasks.Claimant, however, wanted to perform housekeeping tasks which were not within her jobdescription.

4. After being given the option as indicated above, claimant made out her paycheck forthe days she had worked and handed it to the employer to sign. The employer signed the check.Claimant left and did not return to the employer's place of business for the purpose of performingwork. At the time claimant left, her workday had not been completed. Had claimant not left herjob, continuing work was available for her there.

5. During the discussion which led to the employer directing the claimant to either do thework or leave the job, both the claimant and the employer used obscene words and spoke in aloud tone of voice. The use of obscenity and loud tone of voice was not unusual in the workingrelationship between the employer and the claimant.

6. Claimant did not leave the job because of the employer's use of obscenity and loudtone of voice. She left the job because she interpreted the ultimatum given to her by theemployer to mean that she had been 'fired'. At no time did the claimant convey to the employerthat she thought such an ultimatum constituted a 'firing'. Since claimant did not initially performthe work which she was asked to do but instead left the employer's place of business, theemployer thought claimant had quit the job.

MEMORANDUM OF LAW:

The Employment Security Law provides that an individual shall be disqualified fromreceiving unemployment insurance benefits if it is determined that she voluntarily quit her job

37

IN RE VAUGHNPage Two of Three

without good cause attributable to the employer or was discharged for misconduct or substantialfault connected with the work. G.S. 96-14(l), (2), and (2A). Whether an employee voluntarilyterminates her employment or is discharged is a question of law.

Initially, we must decide whether claimant's leaving work on April 3, 1984 and notthereafter returning to her job was a voluntary termination of her employment or whether shewas, in fact, discharged. The critical testimony relative to the matter is that of the claimant, asfollows:

A: Then he said, If you don't want to do the work, just get out. And that wasit for me, I mean, I considered myself fired ....

Q: Okay. Thank you.

ATTORNEY FOR CLAIMANT: Now, what did you do after thatencounter? Did you, did you walk out of your laboratory?

A: Yes, I took my pocketbook, went out the door, but I didn't have a car,because I carpool with this other lady, so I was standing out on the sidewalkno place to go. So I had to go back in and make a phone call and talk to myhusband and tell him to get me. And, but he was not at the place he wassuppose to be by the time this all happened, so I had to wait a few minutesfor him to arrive there, so I could call him. I kind of just sat around waitingfor him to get there. I did the crown, as Dr. Walton told me, so he could notsay that I didn't do what he told me. And a few minutes later, I called myhusband and said, I consider myself fired ....

In order for an employer's language to be interpreted as a discharge, it must possess theimmediacy and formality of a 'firing.' Lawlor v. Unemployment Compensation Board ofReview, 37 Pa. Commonwealth Ct. 380, 391 A2d 8, (1978); Rizzitano v. UnemploymentCompensation Board of Review, 32 Pa. Commonwealth Ct. 59, 377 A2d 1060 (1977). Thedegree of certainty in an employer's language resulting in a termination is often the differencebetween those cases in which the employee's termination was voluntary and those in which theemployer's rather than the employee's act effected the termination.

In the present case, the Appeals Referee held that the claimant had been discharged fromher job. The Adjudicator, with much less evidence before it than the Appeals Referee, found thatthe claimant had voluntarily left her employment. The undersigned is of the opinion that theAppeals Referee erred in finding that claimant was discharged from her job since the recordevidence clearly shows that it was the claimant's act rather than the employer's which effectedthe termination of her employment. Claimant was given a reasonable alternative betweenperforming a task which was within her job description or leaving the job. Claimant opted to dothe latter rather than the former.

38

IN RE VAUGHNPage Three of Three

Claimant was neither coerced nor pressured by the employer to leave her job. The onlypressure or coercion applied by the employer was to get claimant to perform the duties of her joband a reasonable man or woman under similar circumstances would have interpreted theemployer's remarks in this manner. For the foregoing reasons, the undersigned concludes that, asa matter of law, claimant voluntarily left her job and was not discharged by the employer. Theremaining question is whether such leaving was with good cause attributable to the employer.

The burden of showing good cause attributable to the employer for the voluntary leavingof a job is upon the claimant. In re Hodges, 49 N.C.App. 189, 270 S.E.2d 599 (1980); In reVinson, 42 N.C.App. 28, 255 S.E.2d 644 (1979). "Good cause" as used in the statue, connotes areason for rejecting work that would be deemed by reasonable men and women as valid and notindicative of an unwillingness to work. Sellers v. National Spinning Company and ESC, 614N.C.App. 567, 307 S.E.2d 774, dis. rev. denied, 309 N.C. 464 (1983). "Attributable to theemployer" as used in G.S. 96-14(l) means "produced, caused, created or as a result of actions bythe employer." Sellers, supra; Vinson, supra.

The Appeals Referee found that if claimant's separation from employment constituted avoluntary leaving within the meaning of the law, "the employer's verbal abuse towards theclaimant was sufficient and good cause for the claimant to voluntarily leave her position...."However, claimant's own testimony fails to establish that the decision to terminate heremployment was, directly or indirectly, related to the use of obscenity and/or loud tone of voiceby her employer. By her own admission, claimant left the job because she interpreted a particularremark made by her employer as a 'firing", not because of the employer's use of obscenity and/ora loud tone of voice.

Even if claimant left her job because of the obscenity and loud tone of voice utilized bythe employer, the undersigned is not persuaded that working conditions had become sointolerable or unbearable that the claimant had no-alternative but to terminate her ownemployment. Obscenity and/or a loud tone of voice was not unusual in the working relationshipbetween the claimant and her employer and appears to have been used by the claimant as oftenas it was used by the employer.

It is concluded that claimant has not carried her burden of proof and the findings of factand record evidence clearly show that claimant's voluntary leaving was without good causeattributable to the employer.

The above conclusion does not constitute a condonation of an employee's or employer'suse of obscenity and/or loud tone of voice within an employer-employee relationship. However,if such behavior is common practice within the relationship, it is not usually considered a basisfor terminating employment by either the employer or employee. To justify a termination ofemployment when such practice exist, it must be shown that the obscenity and/or loud tone ofvoice went beyond that which was commonly engaged in by the parties and that a reasonableman or woman, under similar circumstances, would have deemed such behavior as being a validreason for terminating employment.


39



IN RE GARDNER(Adopted August 30, 1984)

FINDINGS OF FACT:

1. The claimant last worked for the County Health Department on or around January 30,1984. From February 5, 1984 until February 11, 1984, the claimant has registered for work andcontinued to report to an employment office of the Commission and has made a claim forbenefits in accordance with G.S. 96-15(a) as of the time the Adjudicator issued a determination.The claimant appealed the Adjudicator's determination, and an evidentiary hearing was held byAlbert Jerome Williams, Jr., Appeals Referee, under Docket No. III-UI-4528, who held that theclaimant was disqualified for unemployment benefits. The claimant filed a timely appeal to theCommission.

2. The claimant was discharged from this job because she omitted her employment withthe County Tax Department on employment applications she submitted in order to obtainemployment with the County Health Department.

3. The claimant filed two applications with the above-named employer. The firstapplication was dated and signed May 21, 1982. It was admitted into evidence at the AppealsReferee's hearing without objection as the Employer's Exhibit No. 5. This application ishandwritten. In the space for current or last employer, the claimant indicated a temporaryservices company located in Wilmington, North Carolina. The claimant entered her dates ofemployment with this company as 1980 to "present." This application lists two previousemployers, a concrete company and UNC-W. This application for employment was submitted atthe time the claimant applied for a temporary Clerk Typist III position with the HealthDepartment. The claimant was hired for that job.

4. The claimant filed a second application with the County Health Department onOctober 8, 1982; the application was for a permanent position. This application was admittedinto evidence at the Appeals Referee's hearing without objection as Employer's Exhibit No. 6.This application is typewritten. Under the work history entry for the temporary service company,the claimant shows employment from 1980 until June, 1982. In addition to the concretecompany and UNC-W, the claimant listed an agricultural chemicals company as her employerfrom 1967 until 1971. The claimant was hired as a permanent Clerk Typist III.

5. The claimant did not indicate on either application that she was employed by theCounty Tax Department from October 20, 1981, until December 7, 1981.

6. The applications filed by the claimant with the County Health Department were madeon a form which bears the heading Application for Employment - State of North Carolina. Theform requests that applicants complete a 'Work History," including volunteer experience. Theapplicant is directed to use additional sheets if necessary. At the end of the form, there is a place

40

IN RE GARDNERPage Two of Three

for the signature of the applicant and the date. The following statement appears above thesignature line:

I certify that all of the statements made in this application and any attached documentsare true, complete, and correct to the best of my knowledge and belief and are made ingood faith. I authorize investigation of all statements made in this application and releaseto State Government hiring officials. I understand that false information may be groundsfor rejection of my application and (or) dismissal if I am employed.

The claimant's signature appears below this statement on both applications.

7. In her testimony, the claimant gave two reasons for her failure to list her employmentwith the County Tax Department on her applications with the County Health Department: theclaimant did not think that a five-week term of employment was important when she completedthe first application since that application was for a temporary position; the claimant alleged thatwhen she completed the second application she typed from the first application and did not thinkabout her employment with the Tax Department. The Claimant's Exhibit No. 1, pages 5 and 14,contain similar statements to the effect that the claimant believed that a short term ofemployment was not important; there are also statements that the claimant chose to block out orto forget her experience with the Tax Department, since she had found it unpleasant.Commission Exhibit No. 3, page 5, contains a statement that the claimant did omit her TaxDepartment employment on the application, and chose to "forget and forgive." It is found as afact that the claimant's reason as to why she omitted the information from the second applicationis not persuasive, since that application includes information additional to that which wasincluded in the first application, for example, the claimant's employment with the agriculturalchemicals company.

8. During the claimant's tenure of employment with the County Tax Department, theclaimant received oral warnings and a follow-up written warning. The claimant resigned fromher job with the County Tax Department without notice because of what she deemed to beharassment by the Tax Administrator. The claimant did not file a grievance concerning thealleged harassment. Based on the above findings of fact and the competent and credible evidenceof record, it is found as a fact that the claimant's omission of her employment with the CountyTax Department from her applications for employment with the County Health Department wasintentional, and that the claimant's actions were without good cause.

9. The employer's decision to discharge the claimant was made pursuant to personnelpolicies for Local Government Employment subject to the State Personnel Act, Section 4 -Disciplinary Action - Suspension and Dismissal.

10. The claimant has alleged that she was singled out for discharge for reasons other thanthe falsification of information on her employment applications. The claimant has failed toproduce sufficient evidence tending to show that her discharge was for a reason other than thefalsification of her job applications filed with the County Health Department.

41

IN RE GARDNERPage Three of Three

MEMORANDUM OF LAW:

G.S. 96-14(2) provides that an individual shall be disqualified for benefits for theduration of the unemployment beginning with the first day of the first week after thedisqualifying act occurs with respect to which week an individual files a claim for benefits if it isdetermined by the Commission that such individual is, at the time such claim is filed,unemployed because the individual was discharged for misconduct connected with the work.

Misconduct connected with the work is defined as conduct evincing such wilful orwanton disregard of an employer's interest as is found in deliberate violations or disregard ofstandards of behavior which the employer has the right to expect of his employee, or incarelessness or negligence of such degree or recurrence as to manifest equal culpability,wrongful intent or evil design, or to show an intentional and substantial disregard of theemployer's interests or of the employee's duties and obligations to his employer. G.S. 96-14(2).See also, In re Collingsworth, 17 N.C.App.340, 194 S.E.2d 210 (1973); Yelverton v. KempFurniture Industries, Inc., 51 N.C.App. 215, 275 S.E.2d 553 (1981); Intercraft IndustriesCorporation v. Morrison, 305 N.C. 373, 289 S.E.2d 357 (1982).

It is concluded from the facts at hand that the claimant did wilfully and without goodcause omit information from her application for employment with the above-named employer,with the knowledge that false information could be grounds for the rejection of her applicationand/or her dismissal if she were to be employed. This conduct was clearly a deliberate disregardof standards of behavior which an employer has the right to expect of an employee, and shows anintentional and substantial disregard of the employer's interest as well as the employee's dutiesand obligations to the employer.

The claimant must, therefore, be disqualified for benefits for having been dischargedfrom the job for misconduct connected with the work.

42



IN RE DRAPER(Adopted October 11, 1984)

This matter has come on for consideration by the undersigned upon the employer'sappeal-from the decision rendered by the Appeals Referee. The entire record and file havingbeen considered carefully, the undersigned is of the opinion that the decision of the AppealsReferee should be vacated and the matter remanded for further hearing.

At the appeals hearing, both witnesses for the appellant were not allowed in the room atthe same time when the hearing was being conducted due to a lack of physical space. Its legallyqualified representative, however, was in the hearing room at all times when the hearing wasbeing conducted. Although sequestration of witnesses upon motion can be proper, there was nosuch motion herein, and the limitation on the number of witnesses present in the hearing roomwas due solely to a lack of space. One potential problem of such space limitation is illustrated bythe claimant's ex parte reference to one of the appellant's witnesses as a 'big liar" while thatwitness was being called to the hearing room by the appellant's legally qualified representative.(Transcript, p. 3)

It is the policy of the Commission that suitable and adequate space will be provided toconduct all appeals hearings. If any Appeals Referee is unable at the time and place scheduled toprovide such space, the matter shall be continued until suitable and adequate space can beprovided.

It is now, therefore, ordered, adjudged and decreed that the decision of the AppealsReferee is vacated and remanded for a new hearing and decision. It is further ordered thatsuitable and adequate space be provided for the hearing.

43



IN RE CUNNINGHAM(Adopted November 15, 1984)

FINDINGS OF FACT:

1. The claimant last worked for this employer on May 22, 1984. The claimant appealedthe Adjudicator's determination, and an evidentiary hearing was held by an Appeals Referee whoheld that the claimant was not disqualified for unemployment insurance benefits. The employerfiled a timely appeal to the Commission.

2. Claimant was hired as a market manager in September 1983 by the employer. He latertransferred to the Kinston store in January 1984. Approximately 6 weeks prior to his last day ofwork, claimant, at his own request, was demoted to assistant market manager. Another individualwas transferred from the Jacksonville store to become the Kinston market manager. On or aboutMay 22, 1984, claimant quit his job.

3. Before the Appeals Referee, claimant gave two (2) reasons for his decision toterminate his own employment. They were: (a) he felt pressured to work "off the clock"; that is,overtime without compensation, and (b) a subordinate had spoken to him, on several occasions,in a disrespectful manner. Claimant told the employer, at the time he quit, that it was impossiblefor him to work with his immediate supervisor, the market manager.

4. Claimant's immediate supervisor was the market manager whose superior was the areamarket supervisor. Any complaints that claimant may have had concerning his job were to beinitially presented to the market manager for resolution. If a satisfactory response was notreceived, claimant could have presented the complaint directly (or indirectly through the storemanager) to the area market supervisor for resolution. The market manager and the area marketsupervisor had the authority to direct, counsel, instruct and discipline claimant regarding hiswork performance. The store manager could only discipline market employees with the approvalof the area market supervisor.

5. As assistant market manager, claimant had the authority to counsel, direct and instructother market employees. Such authority included taking appropriate disciplinary action againstthe employees under his supervision.

6. Claimant was expected to perform all of his assistant manager's duties, including theprimary one of daily cutting a sufficient supply of meat, within a 44 hour time period each week.Company policy, of which claimant was aware, required him to perform his work while "on theclock". If he worked 'off the clock', he was subject to disciplinary action.

7. On several occasions prior to his leaving the job, claimant had been counseled by hissuperiors concerning low productivity during his regularly scheduled work hours. It wasclaimant's opinion that such complaints about his work was solely for the purpose of pressuring

44

IN RE CUNNINGHAMPage Two of Four

him to work "off the clock'. Claimant admitted, however, that neither the market manager, areamarket supervisor nor the store manager suggested or mentioned that he work "off the clock".Instead, they always talked in terms of claimant's productivity not being justified by the numberof hours he put in each day or week while "on the clock". Claimant admitted that he neverinformed his superiors that he felt he was being pressured to work "off the clock".

8. It was claimant's opinion that in order to meet the productivity standards set by theemployer, he would have been required to work overtime hours. Although claimant testified interms of working overtime hours while "off the clock", he presented no evidence tending to showthat he could not have worked overtime hours while "on the clock"; i.e., overtime hours forwhich compensation would have been paid.

9. Claimant alleged that he had requested the demotion to assistant market managerbecause, as the market manager, he worked "off the clock" to meet the performance standardsestablished by his employer. When claimant became assistant market manager, it was hisintention to work only during the 44 hours he was scheduled to perform his job duties during anygiven week. It is found as a fact that claimant did not work any overtime hours for which he didnot receive compensation while he was assistant market manager despite his belief that pressurewas being applied to get him to do so. No evidence was presented that claimant had made ademand of the employer to compensate him for any overtime hours he may have worked as themarket manager.

10. As to his second reason for leaving his employment, claimant alleged that asubordinate gave him an "ugly answer" each time he directed or instructed her to perform a task.At no time did claimant inform his supervisor or other superiors that he considered this aproblem. Nor did he discipline the subordinate regarding her actions or statements. Claimantadvanced no reason for his failure to take the appropriate disciplinary action which his positionas assistant market manager authorized him to take in such situations. Approximately one weekprior to him leaving his job, the claimant told the store manager that the subordinate fraternizedwith the market manager and had made several "nasty remarks" to claimant. Company policyrequired employees to obtain the employer's permission to date each other.

11. Prior to leaving his job, claimant took no action or steps to seek relief from what heperceived as pressure for him to work overtime hours without compensation, despite havingopportunities to do so. This also applied to his interaction with his subordinate.

12. At the time claimant left his job, continuing work was available for him.

MEMORANDUM OF LAW:


45

IN RE CUNNINGHAMPage Three of Four

It is clear from the facts and evidence in the record that claimant left his job. He wasneither coerced nor pressured to do so. It is concluded that he voluntarily left his job. Theremaining question is whether he had good cause attributable to. the employer for the voluntaryleaving.

"Good cause," as used in the statue, connotes a reason for rejecting work that would bedeemed by reasonable men and women as valid and not indicative of an unwillingness to work.Sellers v. National Spinning Company, Inc. and Employment Security Commission, 614N.C.App. 567, 307 S.E.2d 774, dis. rev. denied, 309 N.C. 464 (1983). "Attributable to theemployer" as used in G.S. 96-14(l) means "produced, caused, created, or as a result of actions bythe employer." In re Vinson, 42 N.C.App. 28, 255 S.E.2d 644 (1979).

In deciding whether good cause existed for leaving a job, the Commission should inevery case be fully satisfied that, where an employee has left his employment, the reasons fordoing so were of an impelling character which, in the opinion of the Commission, affordedample and complete justification for the severance of his employment. This would exclude allfictitious or feigned reasons or excuses for failure to continue in the work and wouldcomprehend only such causes as operated directly on the employee which made, in the opinionof the Commission, his continuance in the employment impossible, or attended with suchcircumstances as to make it unreasonably burdensome for him to continue therein. ESCInterpretation No. 48 (1944).

The Commission has consistently held that an employer's failure to properly compensatean employee for overtime hours which amounted to a violation of the federal or state wage andhour laws may constitute good cause as that term is defined above. It must be shown, however,that (1) the employer's business is covered by the federal or state wage and hour law; (2) thecomplaining employee worked overtime hours which were required by the employer; (3) theemployer failed to compensate or properly compensate the employee for these hours; (4) theemployee made the employer aware of its omission and demanded compensation; and (5) theemployer wrongfully refused or failed, within a reasonable time after notification of its omission,to remedy the situation. See, LaTruffe v. Unemployment Compensation Board of Review, 453A2d 47 (1982); Soloman v. Board of Review, 461 A2d 1341 (1983); Sirman v. Board of Review,35 Commw. 334, 385 A2d 1052 (1918); Zablow v. DES, 10 CCH Unemployment InsuranceReporter 48, Sec. 631 (Vermont Supreme Court, 1979).

In the case at hand, claimant has failed to meet any of the criteria set out above to showgood cause for leaving work based on a violation of a wage and hour law by his formeremployer. Consequently, it is found that good cause for his voluntary leaving has not beenestablished by the claimant as to this allegation.

The claimant appears to reason that when his supervisors expressed dissatisfaction withthe amount of work done by him during the hours for which he was paid, the only logicalimplication was that he was to do unpaid work. The claimant's reasoning is erroneous since anequally logical and, in view of the employer's acknowledged policy forbidding working "off theclock", likely implication is that the claimant's supervisors were exhorting the claimant to workharder during the time he was at work, which exhortation an employer is privileged to make.

46

IN RE CUNNINGHAMPage Four of Four

Further, the record evidence fails to establish that claimant worked overtime hours withoutproper compensation after he became assistant market manager.

Based on the foregoing, it must be concluded that the claimant has not shown good causefor voluntarily leaving his job based upon an unsubstantiated feeling or thought that his superiorswere pressuring him to work 'off the clock'. This conclusion is amply supported by claimant'sfailure to take any action or steps to retain his employment such as seeking relief from or aremedy for a situation which he perceived to have existed in his place of employment. The N.C.Court of Appeals has stated that an employee must take some necessary minimal steps topreserve the employment relationship. Sellers, supra. The claimant in this case has advanced noreason which would have prevented him from taking minimal steps to retain his employment.

As to claimant's allegation that a subordinate's disrespect toward him led to his decisionto leave his job, the undersigned is of the opinion that, under the circumstances of this case, thisdoes not connote a reason for rejecting work that would be deemed by reasonable men andwomen as valid and not indicative of an unwillingness to work. Claimant had the authority todiscipline this subordinate but chose not to do so. He presented no reasons which would haveimpeded him from taking the appropriate disciplinary action against the subordinate. Further,claimant did not inform his superiors that this subordinate's action could cause him to leave hisjob or, at the minimum, he considered the subordinate's action a problem.

Although the law does not require an individual to perform a vain act, the individual mustfirst show that the act would have been in vain or futile. In the case at hand, the claimant has notshown that had he taken the appropriate disciplinary action against the subordinate or reportedthe matter to his superiors, matters would have remained the same and he would have receivedno support from his superiors in correcting the matter.

In order to avoid being disqualified for benefits for voluntarily leaving a job, the claimantmust show more than just an existence of a problem at work As stated above, the employee mustprove both that conditions of work were such that a reasonable person, willing to work, wouldnot tolerate them and that these conditions persisted in. spite of the employee's reasonable effortsto have them corrected. The claimant here has proved neither with regard to his subordinate.

In summary, the record evidence and the facts found therefrom do not support aconclusion that the claimant has met the burden of showing good cause attributable to theemployer for the voluntary leaving. In re Hodges, 49 N.C.App. 189, 270 S.E.2d 599 (1980); Inre Vinson, 42 N.C.App. 28, 255 S.E.2d 644 (1979).


47



IN RE TYNDALL(Adopted December 17, 1984)

FINDINGS OF FACT:

1. The claimant last worked for this employer on July 3, 1984. From July 1, 1984 untilJuly 14, 1984, the claimant has registered for work and continued-to report to an employmentoffice of the Commission and has made a claim for benefits in accordance with G.S. 96-15(a) asof the time the Adjudicator issued a determination. The employer appealed the Adjudicator'sdetermination, and an evidentiary hearing was held by an Appeals Referee who held that theclaimant was disqualified for unemployment benefits. The claimant filed a timely appeal to theCommission.

2. Approximately eight (8) days prior to his last day of work, claimant was promotedfrom his shop production position to a driver of semi-tractor trailers for the employer. Thepromotion caused claimant's hourly wage to be increased from $3.75 to $4.00 or a 6 1/4%increase. The permanency of the promotion depended upon claimant's performance during hisprobationary period (thirty (30) days). The employer had retained the option of returningclaimant to his shop production position if his performance as a driver was not satisfactory.

3. On or about July 3, 1984 or the 8th day of his employment as a driver, claimantcrashed into the rear end of a 1976 Buick that had come to a complete stop in preparation to turninto a driveway. The collision totaled the car. The employer's insurance carrier was required topay to the driver of the car $1,077.59 for property damage and $150.00 for bodily injury.Claimant admitted that he was told by the police officer that the police report would reflect thathe was following too close.

4. Pursuant to the option which it had retained, the employer, in the person of Mr. ArnoldGaspersohn, President of Woodcomp Corporation, directed claimant to check with the shiftsupervisor about returning to his former position as a shop production worker. Claimant wouldhave retained all benefits which he had accrued during his period of employment with theCorporation. The claimant's former position was still vacant and it was the intent of the employerto return him to that position.

5. Claimant did not comply with Mr. Gaspersohn's instructions; instead, he left theemployer's place of business. Claimant was of the opinion that the accident was unavoidable andthat he should not have been removed from the driver position.

6. When claimant left the employer's place of business, continuing work was available forhim there.

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IN RE TYNDALLPage Two of Three

MEMORANDUM OF LAW:


Prior to 1981, the Commission treated a termination of employment and an immediateoffer of continuing work as involving two (2) issues: a discharge and suitable work, G.S. 96-14(2) and G.S. 96-14(3), respectively. In most of these cases, both claimant and the employerunequivocally stated that the claimant left work or quit because the claimant did not want toaccept continuing work for the employer in a different job. It became very difficult for theCommission to explain how it could take an admitted quit and turn it into a discharge for nowork available, and an offer of suitable work. The Commission, after much consideration,determined that such practice was legally unsound, both as to the provisions of the EmploymentSecurity Law and as to judicial interpretations. E.g., In re Troutman, 264 N.C. 289, 141 S.E.2d613 (1965), which contains an analysis of this type of fact situation in the terms of G.S. 96-14(l)- voluntarily leaving.

In order to be in conformity with sound legal principles and common sense, theCommission determined that the type of case involving the termination of "old work" and theimmediate offer of "new work" would be treated as an issue of voluntarily leaving with orwithout good cause attributable to the employer under G.S. 96-14(l). If the claimant had thechoice of continuing to work for the employer, even though it was a different job, the leavingwas voluntary. In determining whether the claimant had good cause attributable to the employer,the Commission would consider whether the different job was suitable at the time for theclaimant. If the different job was suitable, the claimant did not have good cause attributable tothe employer for voluntarily leaving the job. If the different job was not suitable, the claimant didhave good cause attributable to the employer.

In determining suitability, the standards set forth in G.S. 96-14(3) were to be considered:

. . . the degree of risk involved to his (employees) health, safety, and morals, his physicalfitness and prior training, his experience and prior earnings, his length of unemploymentand prospects for securing local work in his customary occupation and the distance of theavailable work from his residence.

In the present case, the job that the-claimant rejected was the same one which he had heldjust eight (8) days prior to his removal as a driver. Claimant does not in any way allege that theshop production position was not suitable work for him. The hourly wage in the old job was 61/4% less than the new job but the Commission has consistently held that unless an offer ofcontinuing work results in a 15% or more decrease in wages, the individual would not have goodcause attributable to the employer for voluntarily leaving his employment. See ESC PrecedentDecision No. 2, In re Springer, (1982).

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IN RE TYNDALLPage Three of Three

Based on the foregoing, it is concluded that claimant voluntarily left his job and was notdischarged. It is further concluded that the shop production job was suitable for the claimant.Consequently, claimant did not have good cause attributable to the employer for voluntarilyleaving based upon the suitability of the work offered so that claimant could remain employed.

As to whether the employer was justified in demoting claimant from the driver position tothe shop production job, one must consider that the employer had retained the option to makethat decision. Such a decision was to be based upon whether claimant performed his jobsatisfactorily. The undersigned is of the opinion that the employer had a reasonable basis fordeciding that the claimant's performance as a truck driver was unsatisfactory and thereforejustified his removal from that position.

In that the employer's actions were reasonable in light of the existing circumstances andnot arbitrary or capricious, it is concluded that claimant did not have good cause to reject theoffer of continuing suitable work; i.e., good cause for voluntarily leaving his employment.

It is, therefore, concluded that claimant must be disqualified for benefits for voluntarilyleaving his job without good cause attributable to the employer.

50



IN RE LANIER(Adopted July 31, 1987)

This cause came on for consideration by the undersigned upon the CLAIMANT'SAPPEAL from the decision rendered by the Appeals Referee. The undersigned, having reviewedthe evidence in the record, does hereby VACATE the decision of the Appeals Referee andREMAND the cause for a new hearing and decision.

This matter is remanded so that a new Appeals Referee's hearing can be conducted inaccordance with Chapter 8B of the North Carolina General Statutes, Interpreters for DeafPersons. This Chapter provides that when a deaf person is a party to or a witness in anadministrative proceeding before any department of the state, the appointing authorityconducting the proceeding shall appoint a qualified interpreter to interpret proceedings to thedeaf person and to interpret the deaf person's testimony. The law further provides that a deafperson who is entitled to the services of an interpreter under Chapter 8B may waive theseservices; however, a waiver must be approved in writing by the person's attorney or if the personis not represented by an attorney, the approval must be made in writing by the appointingauthority. Before acting, an interpreter shall take an oath or affirmation that he will make a trueinterpretation in an understandable manner to the person for whom he is appointed and that hewill convey the statements of the person in the English language to the best of his skill andjudgment. In light of the above-requirements of 8B of the General Statutes of North Carolina,the hearing in this matter shall be conducted in the following manner:

1. The Appeals Referee shall arrange for the appointment of an interpreter pursuant tothe provisions of Chapter 8B. If the claimant wishes to have his own interpreter and doesnot wish to use the services of an interpreter appointed under Chapter 8B, then theAppeals Referee shall approve in writing the claimant's waiver.

2. Before acting, the interpreter shall be administered an oath or affirmation inaccordance with Chapter 8B. At the first hearing in this matter, the claimant's interpreterwas identified and it was indicated on the record that the "parties had been sworn." Therecord was silent as to whether the claimant's interpreter had been sworn or taken an oathof any kind.

3. The Appeals Referee must very carefully control the hearing particularly if it appearsthat the interpreter chosen by the claimant will also act as a witness for the claimant. Atthe first hearing before the Appeals Referee, the claimant's interpreter's statements couldnot clearly be identified as

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IN RE LANIERPage Two of Two

interpretation of the claimant's statements or her own testimony regarding the claimant'sseparation. It is not acceptable for the interpreter to speak on behalf of the claimant or asa representative of the claimant if her function is actually to interpret statements made bythe claimant. If the interpreter wishes to act as a witness, it must be differentiated whenshe is so doing.

4. The statements of the employer witnesses must be interpreted to the claimant or itmust be otherwise established that the claimant is cognizant of what the employerwitnesses are saying. In this way, the claimant can then formulate questions for cross-examination of the employer witnesses. The Appeals Referee must allow the claimantand the employer the opportunity for cross-examination.

5. If the claimant does not waive the appointment of an interpreter under Chapter 8B, theinterpreter shall be compensated according to the provisions of the law.

52



IN RE ROECKER(Adopted August 31, 1987)

STATEMENT OF CASE:

The claimant filed a NEW INITIAL CLAIM (NIC) for unemployment insurance benefitseffective October 19, 1986. Thereafter, the Commission determined that the weekly benefitamount payable to the claimant was $184.00, and during the benefit year established by theclaimant, the maximum amount of unemployment insurance benefits payable to the claimant was$4,784.00.

The claim was referred to an ADJUDICATOR on the issue of SEPARATION FROMLAST EMPLOYMENT. The Adjudicator, Miriam Byrd, issued a determination underDOCKET NO. 1123-IV on November 4, 1986, finding the claimant disqualified for benefitspursuant to N.C. Gen. Stat. §96-14(2). The claimant filed an APPEAL from theADJUDICATOR'S determination and the matter came on to be heard by an APPEALSREFEREE under APPEALS DOCKET NO. V-UI-52401T. The following individuals appearedat the hearing before the Appeals Referee: Robin D. Roecker, claimant; M. Catherine Tamsberg,attorney for claimant; Mike Plueddemann, employer witness. On December 30, 1986, MitchellA. Wolf, Appeals Referee, issued a decision finding the CIAIMANT NOT DISQUALIED toreceive benefits pursuant to N.C. Gen. Stat. §96-14(2) or (2A). The EMPLOYER APPEALED.Pursuant to the claimant's request, a Commission hearing to consider arguments on points of lawwas held on February 5, 1987. Appearing for the hearing were: M. Catherine Tamsberg andVictor Boone, attorneys for the claimant; Margie T. Case, attorney for the employer; V. HenryGransee, Jr., Deputy Chief Counsel, appeared representing the Commission.

FINDINGS OF FACT:

1. At the time the Claims Adjudicator issued a determination in this matter, the claimanthad filed continued claims for unemployment insurance benefits for the period October 19, 1986through October 25, 1986. The claimant has registered for work with the Commission, hascontinued to report to an employment office of the Commission and has made a claim forbenefits in accordance with N.C. Gen. Stat. §96-15(a).

2. The claimant last worked for Daniel Construction on October 16, 1986. The claimantwas last employed as an Electrical Engineer Aide III and had worked since August 1984 for thisemployer.

3. The claimant was discharged from this job for wilfully and without good causerefusing to take a urinalysis test.

4. On June 27, 1986, the claimant had acknowledged the employer's drug and alcoholabuse policy dated June 13, 1986, and had signed the form regarding it. (Employer's Exhibit #1)

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IN RE ROECKERPage Two of Five

In part, the form she signed stated, ". . . I understand the Company's policies and practices ondrug and alcohol abuse and I agree to abide by them. I further understand that compliance withthe provisions of the Company's drug and alcohol abuse policies and practices is required inorder to remain on Company property or to work on any Company projects . . . ." (Employer'sExhibit #1) Pursuant to this policy, in the fall of 1986, the employer began testing all employeeswho had less than three years of security clearance at the direction of Carolina Power and Light,the owner of the Shearon Harris Nuclear Power Plant where the claimant was employed for theemployer.

5. On October 16 1986, the claimant was directed to submit to a urinalysis test. She gavethe employer no reason for her refusal because she " . . .didn't feel like that it would benefit [her]in any way to . . . [give my] . . . reasoning . . ." to the employer. (Transcript p. 33) While beingexamined on direct by her attorney, she testified:

Q: Why did you refuse to submit to the test?

A: I felt that it was a form of, of really of harassment. I was due to be released from theShearon Harris project on November the 14th, which was less than a month from the daythat they asked me to take the urinalysis. And I felt that it was probably the start of a formof harassment. And I decided that I did not want be ill-treated, so I chose not to take theurinalysis.

Q: When you use the term harassment, what made, what makes you choose that word?Mr. Plueddemann has said everybody was being tested. Why do you feel like it washarassment?

A: Because I was so close to my release date, being November the l4th, that I just feltlike it was a start of more to come. Of, I don't know, maybe harassment isn't the rightword. But it just seems like a wasted cause to start processing someone through that whenthey are so close to being released. (Transcript, p. 34)

It is found as fact that the claimant refused to take the urinalysis test only because of thecloseness of her release date on November 14, 1986. She made no attempt to discuss the refusalwith the employer even though she knew she further could have talked about any questions shehad with the test with Mike Plueddemann, the Senior Industrial Relations Representative for theemployer.

6. Although the Appeals Referee found in his finding No. 17 that the claimant had"several reasons" for her refusal, neither her testimony nor that of the employer's witnesssupports his finding. As found in finding No. 5, she did not give the employer any reason for herrefusal, even though she knew she could have discussed it, and the only reason she gave for herrefusal to the attorney in direct examination was "harassment" -- because of her impending

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IN RE ROECKERPage Three of Five

layoff. It specifically is found that the employer was not harassing the claimant by directing herto take the test since it was complying with its contractor's requirements for the policy to whichthe claimant had agreed in writing on June 27, 1986.

7. The employer's "Drug and Alcohol Abuse Policy" (Employer Exhibit 1) is found to bereasonable and work-related.

MEMORANDUM OF LAW:

The Employment Security Law of North Carolina provides:

An individual shall be disqualified for benefits . . . [f]or the duration of hisunemployment beginning with the first day of the first week after the disqualifying actoccurs with respect to which week an individual files a claim for benefits if it isdetermined by the Commission that such individual is, at the time such claim is filed,unemployed because the individual was discharged for misconduct connected with hiswork.

N.C. Gen. Stat. §96-14(2)

Misconduct connected with the work is conduct evincing such willful or wantondisregard of an employer's interest as is found in deliberate violations or disregard of standardsof behavior which the employer has the right to expect of his employee, or in carelessness ornegligence of such degree or recurrence as to manifest equal culpability, wrongful intent or evildesign, or to show an intentional and substantial disregard of the employer's interests or of theemployee's duties and obligations to his employer. N.C. Gen. Stat. §96-14(2). This definition hasbeen judicially interpreted on many occasions. See, e.g., Williams v. Burlington Industries, 318N.C. 441, 349 S.E.2d 842 (1986); Intercraft Industries Corporation v. Morrison, 305 N.C. 373,289 S.E.2d 357 (1982); Yelverton v. Kemp Furniture Industries, 51 N.C.App. 215, 275 S.E.2d553 (1981); In re Cantrell, 44 N.C.App. 718, 263 S.E.2d 1 (1980); In re Collingsworth, 17N.C.App. 340, 194 S.E.2d 210 (1973).

The Employment Security Law further provides:

An individual shall be disqualified for benefits . . . [f]or a period of not less than four normore than 13 weeks beginning with the first day of the first week during which or afterthe disqualifying act occurs with respect to which week an individual files a claim forbenefits if it is determined by the Commission that such individual is, at the time theclaim is filed, unemployed because he was discharged for substantial fault on his partconnected with his work not rising to the level of misconduct. Substantial fault isdefined to include those acts or omissions of employees over which they exercisedreasonable control and which violate reasonable requirements of the job but shall notinclude (1) minor infractions of rules unless such infractions are repeated after a warningwas received by the

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IN RE ROECKERPage Four of Five

employee, (2) inadvertent mistakes made by the employee, nor (3) failures to performwork because of insufficient skill, ability, or equipment. Upon a finding of dischargeunder this subsection, the individual shall be disqualified for a period of nine weeksunless, based on findings by the Commission of aggravating or mitigating circumstances,the period of disqualification is lengthened or shortened within the limits set out above.The length of the disqualification so set by the Commission shall not be disturbed by areviewing court except upon a finding of plain error.

N.C. Gen. Stat. §96-14(2A).

In a case where the claimant was discharged from his work, the employer has the burdento show that the claimant's discharge was for a disqualifying reason. Intercraft, 305 N.C. at 376.It is concluded from the competent evidence in the record mid the facts found therefrom that theclaimant's refusal to take the urinalysis test was wilful and without good cause. The claimant hadagreed to the employer's policy and wilfully refused to abide by her agreement withoutdiscussing her change of position with the employer or even telling the employer her reason. Theopinions she expressed at the hearing as to her feelings, the unauthenticated affidavit and thearticle offered are irrelevant.

The Commission has no position on the appropriateness of drug testing in the work placeas a policy. If an employer has promulgated such a policy and the employee has agreed to suchpolicy either explicitly as herein or implicitly by continuing to work after the policy has beencommunicated to her, such becomes a rule or policy of the work. An employee's subsequentchange of position does not give her good cause to refuse to take the test. Whether employers,employees, or unions should adopt or should not adopt such policies is outside the jurisdiction ofthis Commission. Except for public employment, which does not apply herein, no "probablecause" or "reasonable basis" standard is constitutionally or statutorily required, although were itrelevant herein, the Commission would find such had been shown.

Commission views this issue similarly to polygraph examinations. Once polygraphexaminations are part of the work, the refusal without good cause to submit to one isdisqualifying. The agreement to a polygraph or other similar examinations can be shown eitherin the original agreement of work or its being adopted thereafter either by specific or explicitagreement by the employee or implicit agreement or ratification by the employee's continuing inwork.

The difference from polygraph to substance testing cases relates to results. Polygraphresults cannot be admitted or used by courts or the Commission. State v. Grier, 307 N.C. 628,300 S.E.2d 351 (1983). Drug or substance test results, however, can be used provided theemployer shows by competent evidence a chain of custody for the tested sample, the reliabilityof the test, and exactly how the claimant violated the policy of the employer. It would seem anexpert witness would be necessary to prove any case involving substance test results.

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IN RE ROECKERPage Five of Five

In this case, the claimant had agreed in writing to a rule, then wilfully violated it withoutgood cause. Such is misconduct connected with work. Employment Security Com. v. Smith, 235N.C. 104, 69 S.E.2d 32 (1952).

The claimant is, therefore, disqualified for unemployment insurance benefits. Pursuant toN.C. Gen. Stat. §96-9(c)(2)b., no overpayment of benefits already paid is established by thisdecision.

DECISION:

IT IS NOW, THEREFORE, ORDERED, ADJUDGED AND DECREED that thedecision of the Appeals Referee is REVERSED, and the CLAIMANT is DISQUALIFIED forunemployment insurance benefits beginning October 19, 1986.

57



IN RE PARIS(Adopted October 31, 1991)

STATEMENT OF CASE:

This case came on for a hearing before the undersigned on Friday, February 10, 1989, atthe local office of the Employment Security Commission in Chapel Hill, North Carolina. Thematter came on for a hearing pursuant to an order referring the matter to the undersigned todetermine whether Thelma Paris was an employee of or independent contractor with Mary D.Emmerson.

Appearing at the hearing before the undersigned and offering testimony were: ThelmaParis; Fred B. Emmerson, Jr.; and Michael Clayton, Field Tax Auditor with the EmploymentSecurity Commission. The Employment Security Commission was represented by C. ColemanBillingsley, Jr., Staff Attorney. Fred B. Emmerson, Jr. is an attorney representing his mother,Mary D. Emmerson, and also offered testimony. Thelma Paris appeared pro se. All parties weregiven ten (10) days from the date of the hearing to present a proposed opinion. No partysubmitted a proposed opinion.

FINDINGS OF FACT:

1. Thelma Paris began working for Mary D. Emmerson as a nurse's assistant. She beganon November 19, 1986, and last worked on or about February 4, 1988. She has a certificate inhome health care and is certified as a nurse's assistant by the State of New York. She answeredan ad in the Village Advocate to obtain this position.

2. Mary D. Emmerson and her husband are both ill and have required care. Parisperformed such duties as bathing, cooking, and taking care of Mary D. Emmerson. She did herpersonal grooming. She would also, from time to time, do grocery shopping. She preparedbreakfast and lunch and normally worked 7:00 a.m. to 3:00 p.m. five to six days per week. Shegave medication according to the instructions of the physician. The grocery shopping was donewith the mother.

3. Paris also would perform services for Fred B. Emmerson such as bathing him, givinghim medication and performing other related services.

4. During the time Paris worked for Emmerson, she last received $6.00 per hour. She waspaid every two weeks and was paid by submitting a time sheet.

5. Her household duties involved cleaning, vacuuming, washing dishes and various otherhousehold chores.

6. As the Emmersons became more ill, her household duties decreased and she spentmore time performing services for the Emmersons directly related to their health needs.

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IN RE PARISPage Two of Four

7. When Paris began this relationship with the Emmersons, she was interviewed by FredB. Emmerson, Jr. She wanted to be paid without Social Security or taxes withheld. Sheunderstood that she would have to pay her own taxes and would have no benefits such asvacation, insurance, etc. She was responsible for arranging for other care givers to be there andwas responsible for arranging for a replacement when she could not be there. She has, onoccasion, submitted a time sheet and paid the replacement out of the money that she received.

8. This employment relationship began with the expressed understanding that Paris wasan independent contractor and not an employee. She acted in a supervisory type capacity for theother individuals who worked for the Emmersons. Mary Emmerson is unable to talk and bothFred B. Emmerson and Mary Emmerson require a great deal of help. Thelma Paris was replacedby a licensed practical nurse because an individual with more extensive training in health carewas needed.

9. Fred Emmerson, Jr., retained the right to discharge or separate Thelma Paris for grossnegligence and to insure that she properly cared for his parents. He did not retain the right nordid he supervise and control the daily activities of the claimant.

OPINION:

G.S. 96-8(5) defines "employer" as an employing unit which has individuals in hisemployment for a certain number of weeks or a certain amount of wages for a calendar quarter.G.S. 96-8(6) defines "employment" as service performed for wage under any contract of hire inwhich the relationship of the individual performing such service and the employing unit forwhich such service is rendered is the legal relationship of employer and employee. If anemploying unit is an employer with individuals in employment, he is liable for unemploymentinsurance contributions.

It becomes necessary, then, to consider the elements of employment under the commonlaw. One of the landmark cases in determining the question of the indicia necessary to constituteemployment under the common law is Hayes vs. Elon College, 22 4 N.C. 11 (1944). In that case,the court held that independent contractors must:

1. Be engaged in an independent business, calling or occupation.2. Have the independent use of his special skill, knowledge or training in the executionof the work.3. Be doing a specified piece of work at a fixed price or a lump sum upon quantitativebasis.4. Not be subject to discharge because he adopts one method of work rather than another.5. Not be a regular employee of the contracting party.6. Be free to use such assistants as he may think proper.7. Be in full control of the assistants.8. Be able to select his own time to perform.

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IN RE PARISPage Three of Four

The court went on to say that the presence of no particular one of these indicia is controlling noris the presence of all required.

Taking each of the items cited in Hayes vs. Elon College, the following observationsmust be made:

1. Paris was a nurse's assistant.2. She performed duties as a nurse's aide taking care of Fred B. and Mary D. Emmerson.3. She was paid by the hour.4. According to the testimony, she could be discharged or separated because ofnegligence.5. Not applicable.6. Paris was free to have other individuals work in her place and did arrange for the otherindividuals to work there.7. The other individual reported to Paris but they were considered to be independentcontractors, too.8. The Emmersons required around the clock care and Paris and Fred Emmerson, Jr.,saw to it that they received around the clock care.

In Scott v. Lumber Company, 232 N.C. 162 (1950), it was held that in the question of anemployer and employee or independent contractor relationship, the test is whether the party forwhom the work is being done has a right to control the work with respect to the manner ormethod of doing the work, as distinguished from the right merely to require certain definiteresults conforming to the contract. If the employer has the right to control, it is immaterialwhether he actually exercises it.

And in 1958, the court expressed the test in everyday language when in Pressley v.Turner, 249 N.C. 102, it said: "Tersely stated, the test which will determine the relationshipbetween parties while work is being done by one which will advantage another is "'who is bossof the job?'"

G.S. 96-8(5)o. provides that employer means "with respect to employment on or afterJanuary 1, 1978, any person who during any calendar in the current calendar year or thepreceding calendar year paid wages in cash of one thousand dollars ($1,000) or more fordomestic service in a private home..."

Revenue Ruling 61-196 states that registered nurses and licensed practical nurses whoperform private duty nursing are generally not employees for federal employment tax purposes.However, the facts and the circumstances in every case must be considered. Nurses aides,domestics, and other unlicensed individuals, are, in general, insufficiently trained or equipped torender professional or semi-professional services, and their services are not those of anindependent contractor. Where an individual performs such services as bathing the individual,arranging bedding and clothing, preparing and serving meals, and occasionally giving oralmedication left in their custody, these individuals are not independent contractors and theemployer is liable for federal employment taxes.

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IN RE PARISPage Four of Four

This case is one that does not easily lend itself to a decision. Certain criteria would indicate thatthis claimant was an employee and others would indicate that she was independent contractor.The undersigned reaches the result that is reached because he believes that the parties clearlyintended for this to be a relationship of employer/independent contractor and notemployer/employee.

ORDER:

It is now, THEREFORE, ORDERED, ADJUDGED AND DECREED that Mary D.Emmerson was not the employer of Thelma Paris and Thelma Paris was an independentcontractor with Mary D. Emmerson.

[This tax opinion was upheld by the appellate courts: State ex rel. Emp. Sec. Comm'n v. Paris,101 N.C.App. 469, 400 S.E.2d 76, aff'd, 330 N.C. 114, 408 S.E.2d 852 (1991)].

61



IN RE LAMBERT(Adopted November 15, 1991)

STATEMENT OF CASE:

The claimant filed a NEW INITIAL CLAIM (NIC) for unemployment insurance benefitseffective July 29, 1990. Thereafter, the commission determined that the weekly benefit amountpayable to the claimant was $133.00, and during the benefit year established by the claimant, themaximum amount of unemployment insurance benefits payable to the claimant was $3,458.00.An ADDITIONAL INITIAL CLAIM (AIC) was filed effective January 27, 1991.

The claim was referred to an ADJUDICATOR on the issue of claimant's eligibility forbenefits under N.C. Gen. Stat. §96-13. The Adjudicator, Kenneth C. Ray, issued a determinationunder DOCKET NO. 1301-00 on May 7, 1991, finding the claimant not eligible for benefitsbecause of inadequate work search. The claimant filed an APPEAL from the ADJUDICATOR'Sdetermination and the matter came on to be heard by an APPEALS REFEREE under APPEALSDOCKET NO. XI-QC-040T. The following individuals appeared at the hearing before theAppeals Referee: Mark A. Lambert, claimant; and Richard Sharpe, Quality Control Investigator.On August 19, 1991, Lawrence Emma, Appeals Referee, issued a decision finding theCLAIMANT NOT ELIGIBLE to receive benefits pursuant to N.C. Gen. Stat. §96-13(a)(3). TheCLAIMANT APPEALED.

FINDINGS OF FACT:

1. At the time the Claims Adjudicator issued a determination in this matter, the claimant hadfiled continued claims for unemployment insurance benefits for the period July 29, 1990 throughMarch 9, 1991. The claimant has registered for work with the Commission, has continued toreport to an employment office of the Commission and has made a claim for benefits inaccordance with N.C. Gen. Stat. §96-15(a).

2. Prior to filing his AIC which was effective on January 27, 1991, claimant worked forKelly Services, Inc. on an assignment at Fabco Fasteners, Inc. Claimant became unemployedwhen there was no longer any work available for him.

3. There is no evidence in the record that claimant looked for work at any place otherthan Fabco Fasteners, Inc., after he filed his AIC effective January 27.

4. Claimant had an employment interview with Fabco on February 8, 1991.

5. On February 14, 1991, claimant was offered a job with Fabco and was told that hewould start work on March 18, 1991 subject to his passing a pre-employment physical.

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IN RE LAMBERTPage Two of Four

6. Claimant took a pre-employment physical and learned that he had passed it onFebruary 26, 1991.

7. Claimant actually began work with Fabco on March 11, 1991.

MEMORANDUM OF LAW:

The Employment Security Law provides that an employed individual shall be eligible toreceive benefits with respect to any week only if the Commission finds that he is able to work,and is available for work: Provided that, unless temporarily excused by Commission regulations,no individual shall be deemed available for work unless he establishes to the satisfaction of theCommission that he is actively seeking work. N.C. Gen. Stat. §96-13(a)(3). This availabilityrequirement has generally been viewed as an indication of a claimant's attachment to the laborforce and is designed to test each claimant's attachment to the labor market. See, In re Beatty,386 N.C. 226, 210 S.E.2d 193 (1974).

This case presents the question of whether one who is involuntarily unemployed andsuccessfully pursues a job prospect to the point that an offer of employment has been made andaccepted will be considered available for work during the period between his acceptance of thejob and its commencement if he makes no other work search contacts for permanentemployment.

The regulations of the Employment Security Commission of North Carolina provide inpertinent part:

Actively seeking work is defined as doing those things which an unemployed person whowants to work would normally do. A prima facie showing of "actively seeking work" hasbeen established when:

During the week for which a claim for regular unemployment insurance benefits hasbeen filed, the claimant has sought work on at least two (2) different days and made atotal of at least two (2) in-person job contacts.

ESC Regulation No. 10.25(a).

Clearly, the determining factor in this case is whether claimant was actively seeking workduring each particular benefit week. ESC Regulation No. 10.25(a) sets forth the requirements fora prima facie case. A prima facie case, if not contradicted by other evidence, establishes that oneis actively seeking work. Absent a prima facie case, a claimant has the burden to show by otherevidence that he is actively seeking work. The facts and circumstances of each particular casemust be considered to determine an individual's availability for work. In re White, 93 N.C.App.762, 379 S.E.2d 91 (1989).

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IN RE LAMBERTPage Three of Four

Justice Lake has eloquently expressed the policy behind the Employment Security Law asfollows:

. . . It does not provide for payment of benefits to one who, through fear that he may beovertaken by honest work, erects around himself all manner of conditions precedent tohis acceptance of employment so as to preclude any possibility of his contact with a job.On the other hand, the statute must be construed so as to provide its benefits to one whobecomes involuntarily unemployed, who is physically able to work, who is available forwork at suitable employment and who, though actively seeking such employment, cannotfind it through no fault of his own.

In re Watson, 273 N.C. 629, 633, 161 S.E.2d 1 (1968).

Certainly, the claimant's genuine acceptance of employment is a conclusive indicationthat he is doing those things which an unemployed person who wants to work would normally doand is attached to the labor force. Further, it is not unreasonable in today's complex businessenvironment that some time might pass between the offer and acceptance of employment and itscommencement. Background and security investigations and, as in this case, physicalexaminations are often required by employers before an otherwise desirable job applicant isfinally allowed to start work. To hold claimant ineligible in such a case would be to punish theindustrious claimant who has been successful in his efforts to remove himself from the roles ofthe unemployed. Such a result is not the intent of the Employment Security Law.

It is concluded from the competent evidence in the record and the facts found therefromthat the claimant has failed to show that he was able and available for work for the weeks endingFebruary 2, and February 9, 1991. During these weeks, the claimant had no assurance ofimminent commencement of permanent employment. The claimant's work search, limited toseeking work with only one employer, was not sufficient to show that he was actively seekingwork as required by law. It is further concluded that the claimant has shown that he was able andavailable for work for the weeks ending February 16 through March 9, 1991. After havingobtained permanent employment to begin in the very near future, claimant's failure to continue tolook for permanent work did not render him ineligible for benefits. It is noted, parenthetically,that a claimant must continue to be available for referral to suitable temporary work under suchcircumstances.

The claimant is, therefore, not eligible for benefits for the claim weeks ending February 2and February 9, 1991, but eligible for benefits for the claim weeks ending February 16 throughMarch 9, 1991.

DECISION:

IT IS NOW, THEREFORE, ORDERED, ADJUDGED AND DECREED that thedecision of the Appeals Referee is REVERSED to the extent that claimant is NOT ELIGIBLEfor unemployment insurance benefits for the claim weeks ending February 2 and February 9,

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IN RE LAMBERTPage Four of Four

1991 but is ELIGIBLE for unemployment insurance benefits for the claim weeks endingFebruary 16 through March 9, 1991.

COMMENTARY:

ESC Regulation No. 10.25(A) establishes a standard that a claimant may use to show that he/she isactively seeking work. Once this standard is met, no further inquiry need be made by the local office. Ifthe standard is not met, the local office must examine the claimant's work search activity further in orderto determine whether he/she is doing those things that an unemployed person who wants to work wouldnormally do.

In re Lambert illustrates that under some circumstances, an individual may show the EmploymentSecurity Commission that he/she is actively seeking work even though two different, in-person worksearch contacts on two different days have not been made each week. One who has successfully obtainedpermanent work to begin at some future date has made a showing of the desire to work and, under thecircumstances, would not be expected to continue the same type work search as one who has no promiseof employment. Along the same lines, a claimant normally employed in certain areas of skill may show anactive search for work by submitting resumes rather than making in-person job contacts. That theEmployment Security Commission has great latitude to make such determinations was recognized by theN.C. Court of Appeals in White v. Employment Security Commission of North Carolina, 93 N.C.App. 762,379 S.E.2d 91 (1989).

65



IN RE LINDSEY(Adopted January 27, 1992)

BELINDA L. LINDSEY, Petitioner-Appellantv.

QUALEX, INC. and EMPLOYMENT SECURITY COMMISSIONOF NORTH CAROLINA, Respondents-Appellees

COURT OF APPEALS OF NORTH CAROLINA103 N.C.App. 585; 406 S.E.2d 609 (1991)

Opinion by: Arnold, Judge

The question presented by this appeal is whether failure to maintain minimum point standardsrequired by the employer's no-fault attendance policy constitutes substantial fault on theemployee's part connected with her work not rising to the level of misconduct. N.C. Gen. Stat.§96-14(2A) (1990). Claimant's conduct does rise to the level of substantial fault. The superiorcourt's judgment upholding the decision of the Employment Security Commission of NorthCarolina to disqualify claimant from receiving unemployment benefits for a period of nineweeks, pursuant to G.S. §96-14(2A), is affirmed.

The record discloses the following: Employer Qualex, Inc. had a no-fault attendance policy. Theemployer did not keep records of an employee's reasons for being absent, tardy, or for leavingearly. The attendance policy was based on a point system. Each employee received 100 pointsupon hire.

Employees lost points for being absent, tardy, or leaving early. The attendance policy providedthe following point deductions:

1. Tardy -- more than 10 minutes after scheduled starting time -- 5 points.

2. Leaving early -- less than two hours before scheduled quitting time -- 5 points.

3. Appointments during shift -- less than two hours -- 5 points, more than 2 hours -- 15points.

4. Excused absence -- 15 points.

5. Unexcused absence -- 50 points.

Absences covered by employee benefits or other company programs such as sick pay, vacationleave, floating holidays, leaves of absence, workers' compensation, funeral leave, and jury dutywere not included in the policy and did not carry penalty points. Fifteen points were added to an

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IN RE LINDSEYPage Two of Six

employee's point total each time she completed thirty consecutive calendar days with no pointsdeducted. An employee could not exceed a total of 100 points at any given time.

The employee's supervisor would review with the employee her current point standing inaccordance with the following schedule: (1) verbal counseling when employee's point total wasreduced to 70 points and (2) written warning and counseling when employee's total was reducedto 35 points. An employee would be discharged when her point total fell to zero.

Qualex, Inc. employed claimant Belinda L. Lindsey from November 1986 to October 1989. Theemployer discharged claimant on 9 October 1989, when her point total fell to zero. Claimantfiled a claim for benefits with the Commission. The adjudicator determined that claimant wasdisqualified for benefits because she was discharged for misconduct connected with heremployment. Claimant appealed. The appeals referee concluded that claimant was disqualifiedfrom receiving nine weeks of unemployment benefits because she was substantially at fault inher job separation. She again appealed and the Commission affirmed. Claimant then appealed theCommission's decision to the superior court, which affirmed the decision in its entirety. Fromthis judgment, claimant appeals.

The standard of review for an appellate court in reviewing the action of the Commission is setout in N.C. Gen. Stat. §96-15(i) (1990): "In any judicial proceeding under this section, thefindings of fact by the Commission, if there is any competent evidence to support them and inthe absence of fraud, shall be conclusive, and the jurisdiction of the court shall be confined toquestions of law." In reviewing the Commission's decision, this Court must determine whetherthe findings of fact are supported by competent evidence and, if so, whether the findings supportthe conclusion of law. Baptist Children's Homes v. Employment Sec. Comm'n, 56 N.C. App. 781,783, 290 S.E.2d 402, 403 (1982).

The Commission made the following pertinent findings of fact:

3. The claimant was discharged from this job for excessive absenteeism and tardiness inviolation of employer's "point" system.

* * * *

5. The claimant violated the reasonable requirements of the job in the following way(s):The claimant, as for all of the employees, was given 100 point[s], 50 to be deducted forany unreported or unexcused absen[ces], 15 deducted for excused absences, 5 deductedfor tardiness or leaving early. In addition, an individual can gain 15 points by going 30days without any tardies or absences.

6. The last time claimant had a full 100 points was in January of 1987. From there sheconstantly and routinely had either lates or tardies for work.

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IN RE LINDSEYPage Three of Six

September, 1987, February, 1988, March, 1988, April, 1988, November, 1988, January,1989.

7. The claimant violated the above job requirements because of personal illness. Many ofthe cases are unknown (although car problems did enter into the tardies).

These findings are supported by the following competent evidence: Claimant knew therequirements of the attendance policy when she was hired in November 1986. The last time sheaccrued the maximum 100-point total was 11 April 1987. (It should be noted that theCommission committed a harmless error in finding that claimant last had a full 100 points inJanuary 1987.) Claimant was tardy on two occasions due to car trouble, each resulting in a 5-point deduction. On another occasion she was tardy and subsequently left more than two hoursbefore scheduled quitting time due to her mother's illness, for which 5 points and 15 points werededucted respectively. Also, she was tardy on 9 October 1989 due to personal illness, for which5 points were deducted. Altogether, these incidents accounted for 35 points in deductions. Noevidence was presented concerning other specific point deductions.

During her last five months, from 7 May 1989 to 9 October 1989, claimant was tardy ten timesand had three excused absences. Also, during this time, she earned 15 points on three separateoccasions for a total of 45 recovery points. As claimant's point total fell, she received counselingseveral times concerning how she lost points and how she could recover points, and she receivedwarnings that she would be discharged if her point total dropped to zero. On 24 May 1989, shereceived counseling and a warning because her point total had dropped to 15. She also receivedcounseling concerning her low point total in September 1989. As of 9 October 1989, the date ofdischarge, her point total was zero.

Thus, there was competent evidence to support the Commission's findings favorable to theemployer and these findings are conclusive on appeal. G.S. §96-15(i); In re Thomas, 281 N.C.598, 604, 189 S.E.2d 245, 248 (1972).

Whether the Commission's findings of fact support its conclusion of law and decision must nextbe considered. In denying her claim for benefits, the Commission concluded that claimant wasdischarged for substantial fault connected with her employment. Claimant contends her conductdid not rise to the level of substantial fault because her conduct was due to circumstances beyondher reasonable control. This argument is unpersuasive.

Claimant was disqualified for benefits under G.S. §96-14(2A), which provides that an individualshall be disqualified for benefits for a period of four to thirteen weeks if her discharge fromemployment is due to "substantial fault on [her] part connected with [her] work not rising to thelevel of misconduct." The statute further defines substantial fault

to include those acts or omissions of employees over which they exercised reasonablecontrol and which violate reasonable requirements of the job but shall not include (1)minor infractions of rules unless such infractions are repeated after a warning was

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IN RE LINDSEYPage Four of Six

received by the employee, (2) inadvertent mistakes made by the employee, nor (3)failures to perform work because of insufficient skill, ability, or equipment. Id. (emphasisadded).

The essence of G.S. §96-14(2A) is that if an employer establishes a reasonable job policy towhich an employee can conform, her failure to do so constitutes substantial fault.

What constitutes "reasonable requirements of the job" will vary depending on the nature of theemployer's business and the employee's function within that business. In general, however,several factors appear to be relevant when determining the reasonableness of the job policy atissue. They include: (1) how early in the employee's tenure she receives notice of the policy; (2)the degree of departure from expected conduct which warrants either a demerit or otherdisciplinary action under the policy; (3) the degree to which the policy accommodates anemployee's need to deal with the exigencies of everyday life; (4) the employee's ability to redeemherself or make amends for rule violations; (5) the amount of counseling the employer affordsthe employee concerning rule violations; and (6) the degree of notice or warning an employeehas that rule violations may result in her discharge. The reasonableness of the employer's jobrequirements should be analyzed on a case-by-case basis in light of the totality of thecircumstances surrounding the employee's function within the employer's business.

An employee has "reasonable control" when she has the physical and mental ability to conformher conduct to her employer's job requirements. For example, an employee does not havereasonable control over failing to attend work because of serious physical or mental illness. Anemployee does have reasonable control over failing to give her employer notice of suchabsences. Also, an employee does not have reasonable control over tardiness caused by anunexpected traffic accident. An employee does have reasonable control over tardiness caused byher failure to maintain her own vehicle. An employee also has reasonable control over her abilityto comply with job rules when the employer's policy gives her the opportunity to make up fordemerits resulting from circumstances in which she had marginal or little control. Reasonablecontrol coupled with failure to live up to a reasonable employment policy equals substantialfault. Id.

Turning to the facts of this case, the employer's attendance policy was reasonable. TheCommission found that the attendance policy (1) gave each employee 100 points upon hire, (2)deducted points for being tardy, leaving early, or taking an excused absence, and (3) awardedpoints for good attendance. Employees received notice of the policy at the beginning of theiremployment. The policy resulted in point deductions commensurate with the degree of departurefrom expected conduct. The policy was accommodating to employees' needs to deal with theexigencies of everyday life because (1) employees were given 100 points at the beginning oftheir employment and (2) the policy gave employees an opportunity to reclaim lost points. Itprovided for counseling both when the employee's point total fell to 70 points and again when itreached 35. Finally, all employees were told early and often that a zero-point total would resultin discharge.

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IN RE LINDSEYPage Five of Six

In addition, claimant had reasonable control over her ability to conform her conduct to therequirements of the employer's attendance policy. The Commission found that claimant wasconstantly and routinely late or tardy, and that she was discharged for excessive tardiness andabsenteeism in violation of her employer's attendance policy. Also, the Commission found thatpersonal illness and car trouble explained only some of her policy violations. Moreover, eventhough claimant could not control the fact that her mother was sick and required her assistance,she could ultimately control the nature of the penalty suffered from tardiness and absenteeismcaused by this factor by reclaiming points through the employer's accommodating policy.Nevertheless, claimant allowed her point total to fall to zero. In light of the reasonableness of theemployment policy and claimant's ability to control her own destiny with respect to that policy,her failure to do so constituted substantial fault.

The Commission's findings support its conclusion of law that claimant was discharged forsubstantial fault connected with her employment, and the conclusion of law sustains theCommission's decision. Her disqualification for unemployment benefits for a period of nineweeks was accordingly appropriate.

Judgment is Affirmed.

Judges Wells and Phillips concur.

[N.C. Supreme Court denied petition for certiorari: 330 N.C. 196, 412 S.E.2d 57 (1991)]

COMMENTARY:

In Lindsey the North Carolina Court of Appeals addressed the question of whether an employee who wasdischarged under a no-fault absenteeism policy could be disqualified from receiving unemploymentbenefits. Ultimately the Court affirmed the Superior Court's affirmation of Commission Decision No.90(UI)0384, which disqualified the claimant for nine weeks pursuant to G.S. 96-14 2A. The NorthCarolina Supreme Court denied claimant's petition for discretionary review.

In reaching its decision, the Court of Appeals enumerated the following factors to be considered indetermining whether to impose a disqualification in absenteeism cases;

1. How early in the employee's tenure he receives notice of the policy;2. The degree of departure from expected conduct that warrants either a demerit or otherdisciplinary action under the policy;3. The degree to which the policy accommodates an employee's need to deal with the exigenciesof everyday life;4. The employee's ability to redeem himself or make amends for rule violations;5. The amount of counseling the employer affords the employee concerning rule violations;6. The degree of notice or warning an employee has that rule violations may result in herdischarge.

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IN RE LINDSEYPage Six of Six

In applying Lindsey to later cases, it is critical for all levels of the Commission (local offices, adjudicators, appealsreferees, etc.) to have records which-contain all relevant evidence on each of the six factors set out above. Thus,developing a complete record is essential compliance with regulations is critical. Staff at all levels of theadjudication process must make the best effort to assemble the most accurate and complete record possible inaccordance with Employment Security Commission Regulations Nos. 13.11, 13.12, 13.14, 13.17, 14.16, 14.18, and14.28.

71



IN RE PELOQUIN(Adopted February 19, 1992)

This cause has come on before the undersigned chairman of the Employment SecurityCommission, pursuant to N.C. Gen. Stat. §96-15(e), to consider the EMPLOYER'S APPEALfrom the decision of Appeals Referee Sam Taylor, under APPEALS DOCKET No. VI-UI-03127T. Having reviewed the record in its entirety, the undersigned is of the opinion that theaforesaid decision must be vacated and the cause remanded for de novo hearing and a newdecision.

Pursuant to the Employment Security Law, appeals referees have the responsibility toconduct hearings. It is the law and policy of the Commission that all interested parties are given areasonable opportunity to have a fair hearing -in connection with the payment and denial ofunemployment compensation benefits. ESC Regulation No. 14.10. Such requires appealsreferees to conduct hearings complete enough to provide sufficient information upon which theCommission can act with reasonable assurance that its decision to pay or deny unemploymentcompensation benefits is consistent with the Employment Security Law of North Carolina andthe Federal Unemployment Tax Act.

In this case, it appears that one of the parties requested a continuance in order to changethe format from a telephone hearing to that of an in-person hearing. The motion to have the caseheard as an in-person hearing rather than as a telephone hearing was denied. The requesting partywas the employer. The employer represents, and the Commission accepts for the purpose of thisorder that the format change request was denied both for being untimely and for being withoutnotice to the other party. The appeals referee apparently followed the appeals department'sinformal policy or rule of "five days," that is, that such requests for continuances must be madeat least five days prior to the hearing.

However, it appears that the request was timely and sufficient. The Commissionconstrues the reasonable opportunity to have a fair hearing requirement to mean that any partycan have the hearing changed from a telephone format to an in-person format at any time prior tothe actual commencement of the appeals hearing. This practice almost always requires that thehearing be rescheduled and delayed in order to reset the case on the docket and give the otherparties proper notice of the changes in the hearing.

There are some practical limitations to the Commission's ability to change cases fromtelephone hearings to in-person hearings. This right is limited by the requirement that the partyrequesting the change to an in-person hearing must be willing to travel to the EmploymentSecurity Commission office most convenient to the other parties, ESC Regulation No. 15.11 (theobjecting party is to travel). Further, the distances that witnesses must travel to the hearing must

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IN RE PELOQUINPage Two of Three

be considered. The appeals referee must also consider allowing the taking of testimony bytelephone from witnesses whose in-person appearance might be unduly burdensome, such asexpert witnesses testimony on behalf of a party in support of or opposition to a drug test.

Except as limited above, an appeals referee may not deny a party's prehearing request tochange a telephone hearing to an in-person hearing unless the referee makes findings showingthat the change to an in-person hearing will deny the opportunity to have a fair hearing to eitherparty.

In this case, it also appears that the employer sought a continuance in order to secure thetestimony of a witness necessary to ascertain the employer's substantial rights. The witness inquestion was a supervisor of the employer. This witness was represented as being the supervisorwith the most knowledge concerning the claimant's separation. At the time of the scheduledhearing, this supervisor was unavailable.

It is part of the responsibility of the appeals referee as the primary fact finder to regulatethe course of appeals hearings. That responsibility includes enabling each party to exercise itsright to call and examine all witnesses believed necessary to ascertain the substantial rights of theparties, ESC Regulation Nos. 14.10 (opportunity for fair hearing), 14.11 (A) (3) (referee toregulate course of hearing and set continued hearings), and 14.15 (A) (every party has right tocall all witnesses).

Effective July 16th, 1991, Senate Bill 429 gives appeals referees the specific statutoryauthority to grant continuances for good cause. The law reads in pertinent part:

G.S. 96-15 is amended by adding a new subsection to read: (dl) A continuance may begranted only for good cause shown and upon such terms and conditions as justice mayrequire. Good cause for granting a continuance shall include but not be limited tothose instances when a party to the proceeding, a witness, or counsel of record has anobligation of service to the State, such as service as a member of the North CarolinaGeneral Assembly, or an obligation to participate in a court of greater jurisdiction.

The passage of Senate Bill 429 demonstrates the General Assembly's intention that allparties to an appeals hearings be given a-fair opportunity to present their witnesses and evidenceto the appeals referee. To accomplish that end, the appeals referee can use the existing specificregulatory authority to grant continuances for good cause when any party's necessary witness isnot available due to a prior commitment which cannot be rescheduled, ESC Regulation No.14.11(A)(5)(d) (referee can continue cases because of a party's prior commitment that can not berescheduled). The recent passage of Senate Bill 429 reinforces the conclusion that underRegulation 14.11(A)(5)(d), the term "party" includes the party's necessary witnesses.

The referee further has an obligation of assisting the parties in the discovery of facts and,if necessary, to take the initiative in the discovery of information, ESC Regulation No. 14.28(rules on how the referee is to conduct and control the hearing). See: Hoke v. Brinlaw Mfg. Co.,73 N.C.App 553 at 559, 327 S.E.2d 254 (1985). The fair hearing requirement makes it evident

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IN RE PELOQUINPage Three of Three

that the parties must have the means requesting the production of evidence which effectseligibility and qualification for benefits. It is therefore also required that the appeals referee musthave the means to compel the production of such evidence.

To secure the attendance of necessary witnesses and the production of relateddocumentary evidence, the appeals referee has the power to issue subpoenas and to continuehearings in support of subpoenas whether issued by the appeals referee or one of the parties. See:G.S. 96-15 (dl) (referee can grant continuance for good cause); ESC Regulation Nos.14.11(A)(2) (referee can issue subpoenas), 14.11(A)(3) (referee can regulate and continuehearings), 14.15(A) (party has right to call-and examine witnesses), and 14.15(D) (referee mayissue subpoenas for witnesses and documents).

In this case, the request for a continuance was made only one working day before thehearing. However, the Commission has no specific time limitation on granting suchcontinuances. While a general three or five day limitation on granting continuances before thehearing might be practical and give some threshold of greater notice to opposing parties aboutscheduling changes, such a fixed rule would also limit the opportunities for parties to effectivelypresent witnesses necessary to ascertain their rights.

In balancing the needs of all parties, the Commission cannot restrict the efforts of partiesto secure all necessary testimony. ESC Regulation No. 14.15(A) reads in pertinent part:

... [E]very party, representative or attorney of record shall, upon request, have the right tocall and examine all witnesses believed necessary to establish the rights and to make anoral cross-examination of any person present and testifying.

In fact, an appeals referee on his or her own motion or by request of a party may conductan in-person hearing at which the attendance and testimony of witnesses is taken by telephone.

Nor can the Commission permit three or five day guidelines to limit its decisions onwhether or not to issue subpoenas to secure all necessary testimony. Appeals referees can evenissue subpoenas during the course of hearings. Here, the Commission's practice requires an in-person hearing. Further, a subpoena, if necessary, to secure testimony of a necessary witnessshould be issued. In other words, the appeals referee may use format changes, split formats,continuances, subpoenas, and adjournments in order to secure necessary testimony.

Here, the record shows there is no evidence that the claimant would have been denied anopportunity to have a fair hearing if the employer's request for a continuance or an in-personhearing had been granted. Indeed, the record suggests that the claimant did not object to acontinuance.

IT IS NOW, THEREFORE, ORDERED, ADJUDGED AND DECREED that thedecision entered by the Appeals Referee is VACATED, and the cause is REMANDED forfurther proceedings consistent with this decision.

74



IN RE LYNCH(Adopted January 20, 1993)

This is an appeal by the EMPLOYER from a decision by Appeals Referee Charles M.Monteith, Jr., mailed on March 13, 1990.

Mr. Larry Lynch, Claimant, who was discharged from his employment with PPGIndustries, filed for unemployment insurance benefits beginning on October 1, 1989. The ClaimsAdjudicator ruled that the claimant was discharged for misconduct connected with hisemployment and disqualified him from receiving benefits. The claimant appealed and the firstAppeals Referee determined that the Claimant was discharged for work related misconduct andtherefore was disqualified from receiving unemployment insurance benefits. The Claimantappealed and the Chief Deputy Commissioner set aside the decision of the Appeals Refereebecause the tape recording of the Appeals Referee's hearing was substantially inaudible.Thereafter, a second Appeals Referee's hearing was conducted by Appeals Referee Monteithwho determined that Claimant was not discharged for misconduct and therefore, was qualifiedfor unemployment insurance benefits. PPG Industries, Incorporated (Employer) appealed to theEmployment Security Commission.

This matter was heard by the Employment Security Commission on April 19, 1990.Members of the Commission present and voting were: Charles R. Cagle, John J. Cavanagh, Jr.,Kevin L. Green, Allen H. Holt and James W. Smith. The Employer was represented by Jerry W.Strong, Personnel Manager. The Claimant did not appear. Thomas S. Whitaker, Chief Counsel,appeared on behalf of the Employment Security Commission.

The Employer lodged no exceptions to the second Appeals Referee's findings of fact, butdisagreed with his conclusions of law. Since the findings are supported by evidence, thosefindings in the attached Appeals Referee's decision are adopted as the findings of fact by theCommission. Consequently, the only issue for review is whether these findings of fact supportthe Appeals Referee's conclusion of law that claimant was not discharged for misconduct orsubstantial fault connected with his employment.

A claimant shall be disqualified from receiving unemployment insurance benefits if he isdischarged from employment for "misconduct connected with work." N.C.G.S. §96-14(2).Misconduct under this standard is defined as:

Conduct evincing such willful or wanton disregard of an employer's interest as is foundin deliberate violations or disregard of standards of behavior which the employer has theright to expect of his employee, or in carelessness or negligence of such degree orrecurrence as to manifest equal culpability, wrongful intent or evil design, or to show anintentional and substantial disregard of the employer's interest or of the employer's dutiesand obligations to his employer.

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IN RE LYNCHPage Two of Two

A claimant may also be disqualified from receiving benefits if discharged fromemployment "for substantial fault on his part connected with his work not rising to the level ofmisconduct." N.C.G.S. §96-14(2A). Under this lower standard, substantial fault includes:

Those acts or omissions of employees over which they exercised reasonable control andwhich violate reasonable requirements of the job . . . .

Measuring the findings of fact against these standards, the Commission concludes thatthe Claimant's conduct at the very least rises to the level of substantial fault under N.C.G.S. §96-14(2A). The question then is whether this conduct falls within the stricter standard ofmisconduct under N.C.G.S. §96-14(2).

In 1989, the General Assembly responded to the growing problem of drug abuse in ourState by amending N.C.G.S. §96-14(2) to clarify that misconduct included:

Discharge for misconduct with the work as used in this section is defined to include butnot be limited to separations initiated by an employer for . . . conviction by a court ofcompetent jurisdiction for manufacturing, selling, or distribution of a controlledsubstance punishable under G.S. 90-95(a)(1) or G.S. 90-95(a)(2) while in the employ ofsaid employer.

The clear and unambiguous intent of this amendment was to include but not limitmisconduct for unemployment insurance benefits to discharged for drug convictions punishableunder N.C.G.S. §90-95(a)(1) and N.C.G.S. 90-95(a)(2). This clearly excludes crimes punishableunder N.C.G.S. 90-95(a)(3) but clearly includes the crime for which the claimant was convicted.See Bradshaw v. Administrative Office of the Courts, 320 NC 134, 357 S.E.2d 370 (1987) wherethe Supreme Court held that disqualification sections must be strictly construed only if thelanguage in the statute is ambiguous. Herein, the language is not ambiguous as N.C.G.S. §96-14(2) specifically refers to crimes punishable under N.C.G.S. § 9 0-9 5(a) (1) and (2).

Thus, on the sole remaining issue before the Commission on whether or not the dischargefrom employment for conviction for possession of cocaine with the intent to sell or deliver,punishable under N.C.G.S. §90-95(a)(1), is misconduct under N.C.G.S. §96-14(2), theCommission holds that it is misconduct.

DECISION:

IT IS NOW THEREFORE, ORDERED, ADJUDGED AND DECREED that the decisionof the Appeals Referee is REVERSED and the CLAIMANT is DISQUALIFIED fromreceiving unemployment insurance benefits.

[This decision was upheld by the appellate court: Lynch v. PPG Industries, 105 N.C.App. 223,412 S.E.2d 163 (1992)]

76



IN RE MCHENRY(Adopted April 8, 1993)

STATEMENT OF THE CASE:

The claimant filed a NEW INITIAL CLAIM (NIC) for unemployment insurance benefitseffective May 31, 1992. Thereafter, the Commission determined that the weekly benefit amountpayable to the claimant was $215.00, and during the benefit year established by the claimant, themaximum amount of unemployment insurance benefits payable to the claimant was $5,590.00.The claim was referred to an ADJUDICATOR on the issue of SEPARATION FROM LASTEMPLOYMENT. The Adjudicator, Denise Sampson, issued a determination under DOCKETNO. 19347 on June 24, 1992 finding the claimant NOT ELIGIBLE for benefits pursuant to N.C.Gen. Stat. §96-13(a). The CLAIMANT filed an APPEAL from the ADJUDICATOR'Sdetermination and the matter came on to be heard by an APPEALS REFEREE under APPEALSDOCKET NO. V-A-14423R. The following individuals appeared in the hearing before theAppeals Referee: Lucile McHenry, claimant; Joe Mantione, representative for claimant; LarrySmith, witness for the claimant; and Susan Williams, witness for the employer. On October 22,1992, Janice Paul, Appeals Referee, issued a decision finding the CLAIMANT DISQUALIFIEDto receive benefits pursuant to N.C. Gen. Stat. §96-14. The CLAIMANT APPEALED.

FINDINGS OF FACT:

1. At the time the Claims Adjudicator issued a determination in this matter, the claimanthad filed continued claims for unemployment insurance benefits for the period May 31, 1992through June 6, 1992. The claimant has registered for work with the Commission, has continuedto report to an employment office of the Commission and has made a claim for benefits inaccordance with N.C. Gen. Stat. 96-15(a).

2. The claimant last worked for US Air, Incorporated on May 25, 1992. The claimant waslast employed as a flight attendant.

3. The claimant left this job because she could not perform her work duties as she wasplaced on mandatory maternity leave as of June 25, 1992. The employer placed her on thismaternity leave because of an agreement between her union, the Association of FlightAttendants, and it, providing for no active flight duty after the 27th week of pregnancy until 45days after giving birth. The employer had no other work available for her and had been givenreasonable notice by her of her status.

4. Beginning on May 25, 1992, the claimant was unemployed due to her pregnancy.

5. Beginning on May 25, 1992, claimant's pregnancy was an adequate disability or healthcondition that was the sole and exclusive reason for claimant's leaving work.

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IN RE MCHENRYPage Two of Three

6. The record does not show there has been any issue raised concerning the claimant'sability to work in positions other than flight attendant.

MEMORANDUM OF LAW:

Pursuant to G.S. 96-14(l)(a. and b.), the claimant fully complied with any and all of thenecessary conditions to make her both eligible and qualified for receiving unemployment benefitdue to leaving work due to an adequate disability or health condition.

The Employment Security Law of North Carolina further provides:

An individual shall be disqualified for benefits . . . (f)or the duration of hisunemployment beginning with the first day of the first week after the disqualifying actoccurs with respect to which week an individual files a claim for benefits if it isdetermined by the Commission that such individual is, at the time such claim is filed,unemployed because he left work without good cause attributable to the employer.

N.C. Gen. Stat. 96-14(l ).

"Good cause" has been interpreted by the courts to mean a reason which would bedeemed by reasonable men and women valid and not indicative of an unwillingness to work.Sellers v. National Spinning Company, 64 N.C.App. 567, 307 S.E.2d 774 (1983), disc. rev.denied, 310 N.C. 153, 311 S.E.2d 293 (1984); In re Clark, 47 N.C.App. 163, 266 S.E.2d 854(1980). "Attributable to the employer" as used in N.C. Gen. Stat. 96-14(l) means produced,caused, created, or as a result of actions by the employer. Sellers, 64 N.C App. 567; In re Vinson,42 N.C.App. 28, 255 S.E.2d 644 (1979); N.C.G.S. 96-14(l). Claimant has the burden of provingthat he is not disqualified for benefits. G.S. 96-14(lA).

The Employment Security Law further provides at G.S. 96-14(l) that where an individualleaves work due solely to a disability incurred or other health condition, whether or not related tothe work, his leaving shall be considered an involuntary leaving for health reasons if theindividual shows:

a. That, at the time of leaving, an adequate disability or health condition, whethermedically diagnosed or otherwise shown by competent evidence, existed to justify theleaving and prevented the employee form doing other alternative work offered by theemployer which pays the minimum wage or eighty-five percent (85%) of the individual'sregular wage, whichever is greater; andb. That, at a reasonable time prior to leaving, the individual gave the employer notice ofthe disability or health condition.

Prior to its enactment into law, the concept of involuntary leaving due to health reasonshad been recognized by our courts. Milliken and Company v. Griffin, 65 N.C.App. 492, 309

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IN RE MCHENRYPage Three of Three

S.E.2d 733 (1983), rev. denied, 311 N.C. 402, 311 S.E.2d 373 (1983); and Hoke v. BrinlawManufacturing Company, 73 N.C.App. 553, 327 S.E.2d 254 (1985). Each case of this naturemust be decided on its own peculiar facts, and the claimant's actions should be assessed in lightof the reasonable person standard. Hoke, 73 N.C.App. at 559. The claimant's testimonyconcerning the advice of a medical authority need not be substantiated by a doctor's sworntestimony or affidavit. Hoke, 73 N.C. App. at 559; Milliken, 65 N.C.App. at 495. Johnson v.U.S. Textiles Corp., 105 N.C.App. 680, 414 S.E.2d 374 (1992).

The payment of benefits is fully according to law and is further in compliance with thecurrently applicable Employment Security Commission Official Interpretation No. 261 on theSubject of Leaves of Absence which states in specific pertinent part:

Nothing contained herein shall be interpreted to conflict with federal and State statutes;specifically, with 26 U.S.C. Section 3304(a)(12) providing that unemployment benefitsmay not be denied solely on the basis of pregnancy or termination of pregnancy.

The Appeals Referee's conclusion of law in Appeals Decision No. V-A-14423R denyingbenefits to the claimant was contrary to law and to the reasoning of Interpretation No. 261. TheAppeals Referee is charged with the responsibility to apply and implement the policy of law asset forth in Interpretation and 26 U.S.C. 3304(a)(12) as amended.

It is concluded from the competent evidence in the record and the facts found therefromthat the claimant has met her burden under the subsection to show she is not disqualified. TheGeneral Assembly recognized that leaving work due to disability or health condition wasgenerally not due to fault on the part of the claimant or employer, providing therefore forpayment of benefits to those still able and available for substantial, full-time work, and alsoproviding protection for the employers who had not caused such disability or health condition.

The claimant is, therefore, not disqualified for unemployment insurance benefits due toher separation from work, and, pursuant to G.S. 96-9(c)(2)(b)(vi), this decision also allows non-charging of the employer's account.

The employer is entitled to have its account fully non-charged for any and all benefitspayable to the claimant by virtue of her leaving due to health reasons pursuant to the employeraccount non-charging authority of G.S. 96-9(c)(2)(b)(vi).

DECISION:

IT IS NOW, THEREFORE, ORDERED, ADJUDGED AND DECREED that thedecision entered by the Appeals Referee is REVERSED and the Claimant is NOTDISQUALIFIED from receiving unemployment insurance benefits beginning May 31, 1992 inaccordance with her claims record, provided she has met all benefit eligibility conditions, and theemployer's account is non-charged.

79



IN RE WATSON(Adopted March 8, 1994)

BERNICE WATSON, Petitioner-Appellant,v.

EMPLOYMENT SECURITY COMMISSION, and THEPLASTIC FORMER COMPANY, Respondents-Appellees.

COURT OF APPEALS OF NORTH CAROLINA111 N.C.App. 410, 432 S.E.2d 399 (1993)

Opinion by: Martin, Judge

The sole question for determination is whether petitioner is disqualified from receivingunemployment benefits on the ground that she left work without good cause attributable to heremployer. We conclude that she is not and reverse the denial of her claim for benefits.

In its Decision denying petitioner's claim, The Employment Security Commission found thefollowing pertinent facts:

2. The claimant last worked for The Plastic Former Company on September 19, 1991.The claimant was employed as a packer and had been employed since March 21, 1989.

3. The claimant left this job. When the claimant left the job, continuing work wasavailable for the claimant with the employer.

4. The claimant left this job because she did not have a reliable means of transportation towork.

5. The employer moved from it [sic] location on Wilkinson Boulevard in Charlotte toMooresville around November or December, 1990.

6. Before the move, the claimant had expressed reservations about her ability to maintainreliable transportation to and from work. Due to Mr. Haywood's [petitioner's supervisor]encouragement, she decided that she would continue working.

7. Mr. Haywood was available to take the claimant to work on Monday and Tuesday. Theclaimant worked Monday through Thursday, and he had taken her to work on pastoccasions.

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8. The claimant's car broke down after the employer moved its plant. She made a seriesof different arrangements to get to work. Immediately prior to leaving her job, she wasriding to work in a truck owned by a co-worker. On September 19, 1991, the truck was indisrepair, causing the claimant and the co-worker to arrive at work at approximately 8:15a.m., fifteen minutes after the scheduled beginning of the shift. Both the claimant and theco-worker were sent home as a penalty for arriving late. The claimant had been tardyseveral times before, and was aware of this penalty as it had been waived twice before.

9. Believing the co-worker's truck to be beyond immediate repair, and having no otherforeseeable means of transportation to work every day of the week, the claimantannounced she was quitting. The co-worker was out of work ten days, but returned towork when his vehicle was repaired.

Petitioner did not except to the Commission's findings; they are therefore presumed to besupported by the evidence and are binding on appeal. Beaver v. Paint Co., 240 N.C. 328, 330, 82S.E.2d 113, 114 (1954). Based on its findings, the Commission concluded "that the claimant'sleaving was without good cause attributable to the employer." The Commission's conclusions oflaw are fully reviewable. Eason v. Gould, Inc., 66 N.C. App. 260, 311 S.E.2d 372 (1984),affirmed, 312 N.C. 618, 324 S.E.2d 223 (1985).

In enacting Chapter 96 of the North Carolina General Statutes, the "Employment Security Law,"our General Assembly declared as the public policy of this State:

Economic insecurity due to unemployment is a serious menace to the health, morals, andwelfare of the people of this State. Involuntary unemployment is therefore a subject ofgeneral interest and concern which requires appropriate action by the legislature toprevent its spread and to lighten its burden which now so often falls with crushing forceupon the unemployed worker and his family . . . . The legislature, therefore, declares thatin its considered judgment the public good and the general welfare of the citizens of thisState require . . . the compulsory setting aside of unemployment reserves to be used forthe benefit of persons unemployed through no fault of their own.

N.C. Gen. Stat. § 96-2. Because the Act was designed to provide protection against economicinsecurity due to unemployment, it should be liberally construed in favor of applicants. Eason,supra.

G.S. § 96-14(1) (1991) provides in pertinent part that:

An individual shall be disqualified for benefits . . . if it is determined by the Commissionthat such individual is, at the time such claim is filed, unemployed because he left workwithout good cause attributable to the employer.

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IN RE WATSONPage Three of Five

"Good cause" connotes a reason for rejecting work that would be deemed by reasonable men andwomen as valid and not indicative of an unwillingness to work. Sellers v. National Spinning Co.,64 N.C. App. 567, 307 S.E.2d 774 (1983), disc. review denied, 310 N.C. 153, 311 S.E.2d 293(1984); In re Clark, 47 N.C. App. 163, 266 S.E.2d 854 (1980). A cause "attributable to theemployer" is one which is produced, caused, created or as a result of actions by the employer andalso includes inaction by the employer. Ray v. Broyhill Furniture Industries, 81 N.C. App. 586,344 S.E.2d 798 (1986).

In Barnes v. The Singer Co., 324 N.C. 213, 376 S.E.2d 756 (1989), a case involving facts similarto those in the present case, our Supreme Court reversed the Commission's denial of benefits tothe claimant. In that case, the claimant, an employee of Singer Company, commuted to theemployer's plant, a forty-four mile round trip, with her brother-in-law, who worked for anothercompany in the same town. The claimant was not licensed to operate a car, nor did she own one.When Singer moved its plant to another location eleven miles further from plaintiff's home,plaintiff no longer had transportation to work, because her brother-in-law was unable to drive herthe additional distance. She was unable to secure other transportation to the new plant and quither job with Singer.

At the time the plaintiff in Barnes applied for benefits, G.S. 96-14(1) disqualified claimants fromreceiving benefits for having left work "voluntarily without good cause attributable to theemployer." The test for disqualification from unemployment benefits consisted of two prongs:was the termination by the employee voluntary, and if so, was it without good cause attributableto the employer. Barnes, supra. The Court found that an employee does not leave workvoluntarily when termination is caused by events beyond the employee's control or when the actsof the employer caused the termination. Id. Specifically, the Court held that:

Singer, by moving its plant, caused plaintiff's commuting distance to be increased fiftypercent and in effect destroyed plaintiff's ability to go from her home to the job site. Themoving of the plant was beyond the plaintiff's control. Her leaving work was in response tothe removal of the plant by Singer and not an act of her own free will. Thus, the externalmotivating factor causing the termination of plaintiff's employment was not of her own doingbut done by Singer for its own benefit. All the evidence was to the effect that plaintiff wantedto continue to work for Singer but, despite her best efforts, could not physically oreconomically do so.

Id., at 216, 376 S.E.2d at 758-59. Because the Court decided the case based upon the"voluntariness" prong of the two pronged test, it found it unnecessary to discuss the secondprong, i.e., the "good cause attributable to employer" issue.

Effective 5 July 1989, G.S. § 96-14(1) was amended to delete the "voluntary" prong of thedisqualification test (except in those instances where the employee quits after being notified bythe employer of a termination at some future date). 1989 N.C. Sess. Laws, ch. 583, § 7. The testfor disqualification is now simply whether the employee left work without good causeattributable to the employer. We believe, however, that the rationale of Barnes and the similarity

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of its facts are sufficiently broad to support a conclusion that respondent employer's moving ofits plant in this case is "good cause attributable to the employer" for petitioner's leaving. TheCommission found that petitioner left her job after her employer moved its plant from Charlotteto Mooresville because she had no reliable means of transportation to work every day of theweek even though she had attempted to make a series of arrangements to get to work. TheCommission also found that when petitioner became aware that her employer was moving itsplant, she expressed reservations about her ability to maintain reliable transportation to work, butthat due to her supervisor's encouragement, she continued work for a period of time even afterthe plant moved.

All of the Commission's findings of fact make clear that petitioner desired, and attempted, tocontinue to work for respondent employer. The relocation of the plant was an act of theemployer, done for its benefit, and was an event over which petitioner had no control. Herleaving work was solely the result thereof. Thus her separation from employment wasunquestionably "attributable to the employer." Under the interpretation which our courts havegiven to "good cause," a reasonable person would clearly view petitioner's reason for quitting herjob as a valid one which does not indicate an unwillingness to work on her part, nor did theCommission find that she was unwilling to work. Although an employee's transportation to andfrom work is not ordinarily the employer's responsibility, petitioner's inability to get to work isthe direct result of her employer's actions in moving its plant, thereby significantly changing thecircumstances of her employment. The result which we reach comports fully with the policyestablished by our General Assembly in G.S. § 96-2 that one who becomes unemployed throughno fault of their own should receive unemployment benefits.

Respondents argue, however, that petitioner in this case, unlike the claimant in Barnes, "chose toaccept the transfer and worked for many months . . ." after the plant relocation occurred. We findthis distinction inconsequential. Petitioner should not be penalized merely because she attemptedto continue working after defendant chose to move the plant to another city. To the contrary,petitioner's efforts should be commended and are in line with our state's policy thatunemployment benefits should go only to those who are not at fault in their unemployment. Wenote that courts in other jurisdictions have similarly approved the award of unemploymentbenefits to persons who left employment due to workplace relocation even when the claimanthad attempted to work at the new location. See Guillory v. Office of Employment Sec., 525 So.2d1197 (La.App. 1988) (employee who initially tried to make additional fifty mile round trip afteremployer relocated plant had "good and legal" cause for leaving work after she became nervousand emotionally upset by the drive); Ross v. Rutledge, 338 S.E.2d 178 (W.Va. 1985) (employer'sremoval of work site an additional 19.8 miles was a substantial unilateral change in theconditions of employment furnishing good cause for leaving work for ten employees who quittheir jobs at the time of the move or shortly thereafter due to the added time and expense oftravel).

For the foregoing reasons, we hold that the Commission erred in disqualifying petitioner fromreceiving benefits. The judgment of the Superior Court is reversed and this case is remanded to

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that court for remand to the Employment Security Commission for entry of an award of benefitsin accordance with this opinion.

Reversed and remanded.

Judges ARNOLD and COZORT concur.

84



ORDER REVOKING, IN PART, PRECEDENT DECISION***************************************

(Adopted February 1, 2010, See ESC Precedent Decision No. 40)

On December 10, 2009, the Full ESC Commission voted to revoke, in part, ESCPrecedent Decision No. 30, In re Garrett (1995), adopted January 22, 1996, in accordance withthe authority granted to it by ESC Regulation No. 21.17(B).

As explained in ESC Precedent Decision No. 40, In re Pehollow (adopted December 10,2009), the language regarding an employer's policy on resignation notice period found inparagraphs 3 and 4 in ESC Precedent Decision No. 30 is defectively incomplete. That is, thelanguage is not consistent with the holdings in other ESC Precedent Decisions and governingcourt cases requiring (1) a showing that the employee knew or should have known about suchpolicy, and (2) that the burden of proving such knowledge is on the employer. Thus, PrecedentDecision No. 30 is no longer legally sound on this point.

IT IS NOW, THEREFORE, ORDERED, ADJUDGED AND DECREED that ESCPrecedent No. 30, In re Garrett (1995), be and the same is REVOKED, in part, and theinconsistent language in paragraphs 3 and 4 shall be removed from ESC Precedent Decision No.30.

85



IN RE GARRETT(Adopted February 1, 2010)

This cause has come on before the undersigned Chairman of the Employment SecurityCommission pursuant to G.S. 96-15(e), to consider the EMPLOYER'S APPEAL from a decision byAppeals Referee J. Lynn Noland, under APPEALS DOCKET NO. XV-A-02156. Having reviewed therecord in its entirety, the undersigned is of the opinion that the aforesaid decision must be vacated andremanded for a hearing de novo and to issue a new decision.

The tape recording of the November 6, 1995 hearing is blank

Every decision of an Appeals Referee shall contain the entire procedural history of the matter,including orders of continuance and remand. When a hearing is remanded, the findings of fact made bythe Referee shall state the procedural posture of the case including the reason for the remand, therequirements of the remand order, and the parties appearing at each of the hearings when an additionalhearing is ordered. Further, it is inappropriate and usually reversible error for the Appeals Referee tomerely recite the previous findings. Certainly, the Appeals Referee can incorporate previous findingsinto the new decision in the interest of judicial economy, but additional findings must be made whenordered in accordance with the order of remand. It should be evident from an Appeals Referee's decisionfollowing an order of remand to take additional evidence and render a new decision that the Refereeheard and considered the additional evidence and complied with the remand order.

IT IS NOW, THEREFORE, ORDERED, ADJUDGED AND DECREED that the decision of theAppeals Referee is SET ASIDE and the cause is hereby REMANDED for further proceedings consistentwith this decision. No overpayment is established of benefits paid pursuant to the decision of theAppeals Referee. G.S. 96-9(c)(2)b, last paragraph.

IT IS ALSO ORDERED that all interested parties shall be duly notified as to time and place forrehearing, and the Appeals Referee shall identify the new decision at the conclusion of the remandedhearing by using all previously assigned docket numbers.

IT IS ALSO ORDERED that all documents contained in the record transmitted to the AppealsReferee with this decision, including the appeal and all other correspondence or documents by whatevername or designation, shall be marked as exhibits and entered into the record by the Appeals Referee onremand in order that the record will be complete as required by law and ESC Regulation 14.18(C).

IT IS ALSO ORDERED that a decision in this matter shall be mailed within 30 days from thedate of this decision, unless an extension is granted in writing by the Chief Appeals Referee and madepart of the record.

86



IN RE HUCKABEE T/A RED CARTAGE(Adopted July 3, 1996)

STATEMENT OF CASE:

This case came on to be heard before Guy C. Evans, Deputy Commissioner, onWednesday, July 25, 1990, at the local office of the Employment Security Commission (ESC) inFayetteville, North Carolina. The matter came on for a hearing pursuant to an order referring thematter to a Deputy Commissioner to determine whether or not certain individuals wereemployees of or independent contractors with J. Walter Huckabee T/A Red Cartage.

This matter was originally scheduled to be heard on March 14, 1990 and was continued atthe request of the employer's wife. The matter was subsequently scheduled to be heard onWednesday, May 2, 1990 and was continued at the request of the employer's attorney.

Appearing at the hearing before the Deputy Commissioner and offering testimony were:Vickie V. Burton and Lorraine Huckabee, witnesses for the employer; Coy Thomas Stewart andDennis K. Crumpler, subpoenaed witnesses for the ESC; and Tom Holmes, Field Tax Auditor,and Phil Smith, Field Tax Auditor Supervisor, both with the ESC. The employer was representedby Steven J. O'Connor, Attorney at Law. The ESC was represented by C. Coleman Billingsley,Jr., Staff Attorney. Present as an observer was Kaye Corbett, Field Tax Auditor with the ESC.

Guy C. Evans, Deputy Commissioner, issued an opinion on January 8, 1991, holding theloaders to be employees and not independent contractors.

The employer entered exceptions to the opinion of the Deputy Commissioner and ahearing before the undersigned Chairman of the ESC was held on April 18, 1991. An OrderOverruling Exceptions and affirming the opinion of the Deputy Commissioner was issued onApril 30, 1991. From that order, the employer entered Notice of Appeal to the Superior Court.

The matter came on for hearing before the Honorable George R. Greene, Judge ofSuperior Court, on September 9, 1991. He issued an order making findings of fact and reversedthe opinion of the ESC. From the judgment or order of the Superior Court, the ESC entered anappeal to the Court of Appeals. The Court of Appeals vacated and remanded the matter to theSuperior Court on January 5, 1993 [No. 9112SE1211, Reported per Rule 30(e)].

The matter was heard on October 11, 1993 before the Honorable Gary E. Trawick, JudgePresiding of the Cumberland County Superior Court. On October 31, 1993, Judge Trawickentered a judgment affirming the findings of fact of the ESC in their entirety and remanding thematter to the ESC for the ESC to make additional findings of fact based on questions in thejudgment and for rendering of a new decision.

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IN RE HUCKABEEPage Two of Eight

FINDINGS OF FACT:

The following seventeen (17) findings of fact are the original findings of fact of theDeputy Commissioner and affirmed by the Superior Court in the order of October 31, 1993.

1. This hearing was the result of a protest entered by the employer to an UnemploymentTax Assessment and Demand for Payment mailed September 21, 1989.

2. J. Walter Huckabee T/A Red Cartage is a sole proprietorship. It was formed in 1987.

3. Red Cartage has a contract with various trucking companies to load tires onto theirtrailers at the Kelly Springfield Tire Manufacturing Plant. The trucking companies bring emptytrailers to the Red Cartage lot and pick up loaded trailers for delivery. Red Cartage takes theempty trailers to Kelly Springfield to be loaded with tires. Red Cartage brings the loaded trailersfrom Kelly Springfield to the business location of Red Cartage for the trailers to be picked up bythe various trucking companies.

4. Red Cartage reports its office personnel and its truck drivers as employees. RedCartage contends that the individuals who load the trailers at Kelly Springfield are independentcontractors and not employees.

5. The Unemployment Insurance Tax Assessment and Demand for Payment mailedSeptember 21, 1989, was the result of an audit investigation by Tom Holmes and Phil Smith.They determined that the loaders of the trailers were employees of Red Cartage. A Form NCUI685 was completed for the 3rd and 4th Quarters of 1987; the lst, 2nd, 3rd, and 4th Quarters of1988; and the lst and 2nd Quarters of 1989 showing the wages of the loaders and the taxes pluspenalties and interest due on those wages. (Commission Exhibits 24-26)

6. Tires may be loaded five days a week at Kelly Springfield beginning at 7:30 a.m., 1:30p.m., 7:30 p.m., or 1:30 a.m. Coy Thomas Stewart and Dennis K. Crumpler are both loaders.Crumpler has worked for Red Cartage since 1987 and Stewart since 1988. Crumpler works at1:30 p.m. and is the number one loader on that shift. Stewart works at 7:30 a.m. and is thenumber five loader on that shift. Red Cartage (the employer) obtains the services of variousindividuals to load the trailers it takes to and removes from Kelly Springfield (Kelly).Crumpler was doing this work for another employer prior to going to Red Cartage.

7. The employer obtains the services of loaders and, in some cases, trains them. Theemployer apparently stopped training loaders in 1988. It takes approximately one or two days to

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IN RE HUCKABEEPage Three of Eight

train a loader. They train with other loaders. Crumpler has trained loaders at the request ofVickie Burton, the employer's bookkeeper, or John Burton, the employer's office manager. Theemployer and Kelly will only allow an individual to be trained one or two days. If an individualis not able to learn the work in one or two days' training, he is not retained.

8. The employer maintains a list of loaders by shift. The employer telephones loaders toreport to Kelly when needed. Stewart, who is number five on the 7:30 a.m. shift, will be the fifthloader called. If there are not five loads available on that shift, he may be called for another shift.Loaders are called at approximately 6:00 a.m. for the 7:30 a.m. shift.

9. Crumpler, number one loader on the 1:30 p.m. shift, will be called at approximately11:00 a.m. He is the first loader called. He will be told what loads are available and given hischoice of what trailer to load. A loader will normally load one trailer per shift. It takes two ormore hours to load a trailer.

10. Loaders are paid by trailer size and weight. A loader may make more money if he isable to load more tires into a trailer. The type of tire also affects the weight. A trailer load oftruck tires would weight more than a trailer load of car tires. Some jobs do not call for full loads.

11. Stewart and Crumpler normally work five days per week. Kelly at one time wasworking six days per week but has reduced its operations to five days per week. Stewart andCrumpler normally take the jobs assigned. If they do not take a job, the employer calls the nextloader.

12. While there is a turn-over in loaders, some unspecified number of loaders work on aregular basis for the employer and have done so for a period of time.

13. The only equipment involved in loading a truck is a hand-truck and that belongs toKelly. When the loader reports to Kelly, he had to go through the gate guard. He then reports toKelly personnel at the loading dock. Only one individual is permitted to load a truck. If the Kellypersonnel do not recognize or know the loader, they will verify the loader's identity with RedCartage. The only time more than one loader is allowed is when a loader is training anotherindividual.

14. The loader knows from the telephone call which truck he is to load and what he is toload. He will load the tires provided by Kelly personnel onto the trailer. He will keep a record ofthe tires loaded and verify the number loaded with Kelly personnel. When the Kelly tally and theloader tally match (either initially or after recount), the loader is given a pass to leave the Kellyproperty. The loader gives the pass to the gate guard on his departure.

15. The employer had the loader sign a contract that stated that they were contractors.The contract provided for the method of pay. The loaders did not negotiate the contract and hadno input into the amount of money to be paid. Loaders had to sign the contract in order to work.

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16. During a meeting with Smith and Holmes, J. Walter Huckabee told them that theloaders were employees.

17. The employer could terminate the services of the loaders at any time withoutincurring any penalty or financial obligation to the loaders other than for work alreadyperformed. The loaders could cease doing work for Red Cartage at any time without incurringany liability to Red Cartage.

The following findings of fact numbered 18 to 27 are the questions posed by the SuperiorCourt with the corresponding answer.

18. Could the loaders work for other cartage companies and did they work for othercartage companies? Loaders were apparently not prohibited from working for other cartagecompanies though there is no evidence that any of them did so. The two employees whoappeared at the hearing did not do so. Those two individuals generally performed all work thatwas available working five or six days per week for Red Cartage.

19. Were the loaders required to work every day or to inform Red Cartage of theirwhereabouts? Workers were not scheduled in advance but were telephoned prior to thebeginning of the shift in an order set forth on a list maintained by the employer. There was norequirement that workers inform Red Cartage of their whereabouts, but those that worked on aregular basis for Red Cartage apparently contacted Red Cartage if they were not at home to betelephoned.

20. Did Red Cartage have control or supervision over how the trucks were loaded? RedCartage did not control and-supervise how the trucks were loaded, Kelly Springfield did so.

21. Could the loaders refuse loads when called, did the loaders refuse loads, and did theloaders sometimes load for other haulers? Loaders could refuse loads and did refuse loads.Loaders working for Red Cartage did not normally work for other loaders. One of the twowitnesses worked for another cartage company for one load with the approval of Red Cartage.

22. Under the written contracts, were the loaders liable for their own negligence? Yes.

23. Did Red Cartage furnish equipment or materials to the loaders to be used inperforming their services? Red Cartage furnished no equipment. Kelly Springfield furnished anyequipment required.

24. Could the loaders increase their earnings by loading more weight on specified trucksand by choosing a particular loading job that had a greater potential for profit? Loaders were paidby weight of tire loaded. A special order called for a specific load, and the loader got paid for theweight of that specific load. A full trailer called for the loader to fill the trailer and Kelly requiredthat the loader completely fill the trailer. An experienced loader might be able to get more weightin a trailer than an inexperienced loader. Also, weight varied by the type of tire. A special load

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might weigh more than the full load due to the type of tire. The loader does not have control overthe length of the trailer (longer trailers would carry more tires and potentially more weight) andloads the trailer to which he has been assigned by Red Cartage when he arrives at KellySpringfield. The first-called loader or loaders might get a choice of loads, but eventually therewould be no choice.

25. Did the loaders carry liability insurance for any loss or damage to themselves or toRed Cartage or to Kelly Springfield? There is no indication that any of the loaders carriedliability insurance.

26. Was the job site of the loaders an "at risk" situation because the loaders wereclassified as independent contractors with no employer provided benefits such as insurance, etc.?Loaders had no benefits, were potentially personally liable for any damage, and had noprotection from Red Cartage or Kelly Springfield for any at-work injury or death.

OPINION:

G.S. 96-8(5) defines "employer" as an employing unit which has individuals in hisemployment for a certain number of weeks or a certain amount of wages for a calendar quarter.G.S. 96-8(6) defines "employment" as service performed for wage under any contract of hire inwhich the relationship of the individual performing such service and the employing unit forwhich such service is rendered is the legal relationship of employer and employee. If anemploying unit is an employer with individuals in employment, he is liable for unemploymentinsurance contributions. G.S. 96-9(a), et seq.

It becomes necessary, then, to consider the elements of employment under the commonlaw. One of the landmark cases in determining the question of the indicia necessary to constituteemployment under the common law is Hayes vs. Elon College, 22 4 N.C. 11 (1944). In that case,the court held that independent contractors must:

(a) Be engaged in an independent business, calling or occupation.(b) Is to have the independent use of his special skill, knowledge or training in theexecution of the work.(c) Is doing a specified piece of work at a fixed price or a lump sum upon quantitativebasis.(d) Is not be subject to discharge because he adopts one method of work rather thananother.(e) Is not in the regular employ of the other contracting party.(f) Is free to use such assistants as he may think proper.(g) Has full control over such assistants.(h) Selects his own time to perform.

The court went on to say that the presence of no particular one of these indicia is controlling noris the presence of all required. Id.

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IN RE HUCKABEEPage Six of Eight

Taking each of the items cited in Hayes vs. Elon College, following observations must bemade:

(a) The individuals involved loaded trucks. That loading required one or two daystraining and would not be classified as an independent business, calling, or occupation.The loaders had no business themselves and did not hold themselves out to be inbusiness;

(b) The loaders loaded trucks, which requires one or two days training and does notinvolve special skill, knowledge, or training to execute the work;

(c) Workers are paid based on the weight of tires and the size of the trailer loaded basedon a formula established by the employer;

(d) Workers can be separated for any reason;

(e) Many of the loaders work for Red Cartage five days per week on a regular andongoing basis;

(f) Workers cannot use assistants;

(g) Not applicable;

(h) Workers worked specific shifts when work was available. A worker could request ashift but work had to be performed during the specified shift.

In Scott v. Lumber Company, 232 N.C. 162, 59 S.E.2d 592 (1950), it was held that in thequestion of whether the relationship is that of employer and employee or independent contractor,the test is whether the party for whom the work is being done has a right to control the work withrespect to the manner or method of doing the work, as distinguished from the right merely torequire certain definite results conforming to the contract. If the employer has the right tocontrol, it is immaterial whether he actually exercises it.

The Supreme Court expressed the test in everyday language when in Pressley v. Turner,249 N.C. 102, 105 S.E.2d 289 (1958), it said: "Tersely stated, the test which will determine therelationship between parties while work is being done by one which will advantage another is'who is boss of the job?'"

An employer should not be able to avoid the impact of the Employment Security Law becausethe structure of the industry and its method of operation permits the employer to operate withoutgiving orders in the conventional sense. In other words, control can be implicit if the nature ofthe business is such that all the control needed can be affected by establishing a certain patternof operations and engaging persons, who if they respond normally, will conform

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IN RE HUCKABEEPage Seven of Eight

to the established pattern. Foster v. Michigan Employment Security Commission, 15 Mich.App.96, 166 N.W.2d 316 (1968); Grant v. Director, 71 Cal.App.3rd 647, 139 Cal. Rptr. 533 (1977).There is no evidence that the employer retained the right to control.

The employer's reliance on Reco Transportation, Inc. vs. Employment SecurityCommission, 81 N.C.App. 415, 344 S.E.2d 294, pet. disc. rev. denied, 318 N.C. 509, 349 S.E.2d865 (1986) is misplaced. The court specifically noted that the drivers had investments. Thedrivers could refuse to haul a load of freight assigned by Reco and using Reco trucks, could haulfreight that the driver secured. Finally, the purchase price of the tractor-trailer rigs has risen toan extent to make it not financially feasible for would-be owner/operators to purchase they owntractor-trailer rigs.

More on point is State, ex rel ESC vs. Faulk, 88 N.C.App. 369, 363 S.E.2d 225, pet. disc.rev. denied, writ of supersedeas denied, 321 N.C. 480, 364 S.E.2d 917 (1988) wherein taxidrivers were held to be employees and Youngblood vs. North State Ford Truck Sales, 321 N.C.380, 364 S.E.2d 433 (1988) wherein the Supreme Court held that the trainer obtained by NorthState Ford to train its employees was an employee of North State Ford because North State Forddesignated the equipment to be used in training and designated the hours of training.

Also of note is Service Trucking, Inc. vs. United States, 347 F.2d 671 (4th Cir. 1965),wherein it was held that individuals obtained by truck drivers to unload the trucks in cities wherethe trucking company had no terminals were employees of the trucking company.

Here, the workers did not report to the place of duty or call if they were not able to reportto work as is customary in most businesses. In this business, the employer telephoned theemployee several hours prior to the beginning of the shift to notify the worker whether or notthere was work.

The loaders did not have the ability to make a profit or suffer a loss. The workers werepaid based on the size of the trailer loaded and the weight loaded into the trailer. This is nothingmore than a worker being paid based on production.

Also important is the employer's admission that these loaders were employees. His wife'sallegation that he was somehow not competent or capable of carrying on his affairs is notsupported. J. Walter Huckabee is an individual and is the employer. There is absolutely noshowing that any Court has removed him from the handling of his business or that he is notcompetent and capable of handling his affairs. Therefore, his admission carries great weight.

There was not a meeting of the minds and the employees and the employer did not,collectively, have a common intent for the loaders to be independent contractors. See, ESC vs.Paris vs. Emmerson, 101 N.C.App. 469, 400 S.E.2d 76, affirm 330 N.C. 114, 408 S.E.2d 852(1991). The individuals performing services as loaders were providing manual labor requiringlittle training or skill to perform the work. These individuals were loading tires onto a truck.

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IN RE HUCKABEEPage Eight of Eight

This work is not the type of work where someone has a special business or occupation utilizingskill, knowledge, and training. It is a manual labor type situation where the employer isattempting to avoid its tax responsibilities by labeling employees independent contractors.Whether Red Cartage supervised and controlled the activities of the loaders or it was delegatedto Kelly Springfield, who did have the right to supervise and control the loading of the trucks, isnot material. Under the arrangement, Kelly Springfield had the right to supervise and control theactivities and work of the employees of Red Cartage.

It is concluded that the loaders were employees of J. Walter Huckabee T/A Red Cartage.Taxes plus penalties and interest as noted on the Unemployment Tax Assessment and Demandfor Payment mailed September 21, 1989 are due. Interest at the statutory rate of one-half of onepercent (.5%) per month on the unpaid tax continues to accrue.

ORDER:

It is now, THEREFORE, ORDERED, ADJUDGED AND DECREED that J. WalterHuckabee T/A Red Cartage is the employer of the loaders it engages to load trailers at KellySpringfield Tire Plant. Taxes plus penalties and interest as noted on the Unemployment TaxAssessment and Demand for Payment mailed September 21, 1989 are due. Interest accrues at thestatutory rate of one-half of one percent (.5%) per month.

Commentary:

A Cumberland County Superior Court Judge reversed this tax opinion on June 30, 1994. ESC appealed tothe N.C. Court of Appeals and a divided three-judge panel (Judge Cozort dissenting) entered a decisionreversing the judgment of the Superior Court Judge: State ex rel. Emp. Security Commission v.Huckabee, 120 N.C.App. 217, 461 S.E.2d 787 (1995). Upon appeal by the employer, the decision of theCourt of Appeals was affirmed, per curiam, by the N.C. Supreme: 343 N.C. 297, 469 S.E.2d 552 (1996).

94



IN RE BROWN(Adopted April 30, 1997)

STATEMENT OF THE CASE:

The claimant filed a New Initial Claim (NIC) for unemployment insurance benefitseffective November 10, 1996. Thereafter, the Commission determined that the weekly benefitamount payable to the claimant was $87.00 and, during the benefit year established by theclaimant, the maximum amount of unemployment insurance benefits payable to the claimant was$2,262.00.

The claim was referred to an adjudicator on the issue of separation from lastemployment. The Adjudicator, Cindy Walters, issued a determination under DOCKET NO.7947 finding the claimant disqualified for benefits beginning on November 10, 1996. TheAdjudicator in her determination ruled that the claimant left her job pursuant to N.C. Gen. Stat.§96-14(1) by failing to comply with the employer's policy to contact the company each day sheis not working on assignment.

The claimant filed an appeal from the adjudicator's determination and the matter cameon to be heard by an appeals referee under Appeals Docket No. VI-A-16676. The followingindividuals appeared at the hearing before Appeals Referee John F. Pendergrass on January 22,1996: the claimant; and, Wendy Pace, Operations Manager, for the employer. On January 29,1997, Appeals Referee Pendergrass issued a decision upholding the determination and findingthe claimant disqualified to receive benefits. The claimant appealed the decision issued by theAppeals Referee.

FINDINGS OF FACT:

1. The claimant had filed continued claims for unemployment insurance benefits for theperiod November 10, 1996 through December 14, 1996. The claimant has registered for workwith the Commission, has continued to report to an employment office of the Commission andhas made a claim for benefits in accordance with G.S. §96-15(a).

2. The claimant had worked for the employer at sites operated by the employer'scustomers. The employer is a temporary personnel service company.

3. The claimant last completed a work assignment for the employer on Saturday,November 9, 1996.

4. On Monday, November 11, 1996, through Wednesday, November 13, 1996, theclaimant contacted the employer as required by its initial employment agreement. However, theemployer had no work available for the claimant.

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IN RE BROWNPage Two of Four

5. On November 13, 1996, the claimant went to the Employment Security Commissionlocal office where she applied for unemployment insurance benefits. At the time that theclaimant applied for benefits, there were no available assignments from the employer.

6. After November 13, 1996, the claimant continued asking for assignments from theemployer, and the employer continued asking the claimant to take assignments.

MEMORANDUM OF LAW:

The Employment Security Law of North Carolina provides that where there is aseparation, the issue of qualification for benefits upon that separation is decided under G.S. §96-14. Temporary personnel service employers (equivalent to private personnel service employersas defined in G.S. §95-47.l) are treated as any other employer under the Employment SecurityLaw.

The Employment Security Law also provides:

For the purpose of establishing a benefit year, an individual shall be deemed to beunemployed...if he has payroll attachment but, because of lack of work during the payrollweek for which he is requesting the establishment of a benefit year, he worked less thanthe equivalent of three customary scheduled full-time days in the establishment, plant, orindustry in which he has payroll attachment as a regular employee. If a benefit year isestablished, it shall begin on the Sunday preceding the payroll week ending date.

G.S. §96-8(10)a.

An employee of a temporary personnel service employer whose assignment has endedand who is offered another assignment prior to filing an NIC or AIC for unemploymentinsurance benefits who does not accept the assignment and files a claim shall be treated ashaving left work under G.S. §96-l4(l). Whether or not claimant left work with good causeattributable to the employer shall depend on whether or not the new assignment is suitable work.In determining whether or not the new assignment is suitable work, Commission PrecedentDecision No. 19, In re Tyndall, shall be applied.

An individual employed by a temporary personnel service employer who files a NICor AIC for unemployment insurance benefits after an assignment has ended or after he/she is notpermitted to return to an assignment and prior to an offer of another assignment shall not beconsidered separated from employment under G.S. §96-l4(l), (2), (2A) or (2B), but shall bedeemed unemployed in accordance with G.S. §96-8(l0)a. and b., unless the claimant has beendischarged. If claimant has been discharged, then claimant's qualifications to receive benefitsshall be determined in accordance with G.S. §96-l4(2), (2A) or (2B).

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IN RE BROWNPage Three of Four

For any week when a claimant is receiving benefits under G.S. §96-8(l0)a. or b. andfails to work all the work her/his temporary personnel service employer has made available tothe claimant, the claimant's eligibility to receive benefits shall be decided under G.S. §96-l3(a).

When a separated individual in claims status refuses an offer of work or an assignmentby the temporary personnel service employer or any employer, the refusal shall be decided underG.S. §96-l4(3). In a case decided under G.S. §96-l4(3), once an employer or the Commission,whichever is appropriate, shows that offered work is suitable work, then the claimant has theburden of showing that he failed to accept the work with good cause.

In a case involving a temporary personnel service employer, as in a case involving anyother employer, if a claimant quits work, the claimant has the burden of showing that he/she quitwith good cause attributable to the employer. In a case where a claimant is discharged, theemployer has the burden of showing that the claimant was discharged for a disqualifying reason.In deciding a case under G.S. §96-l4(l), (2), (2A), (2B) or (3), such items as a written agreementbetween the employer and the employee, written instructions to the employee, the application foremployment, and/or oral agreements or oral instructions are relevant and pertinent evidence.

On the other hand as a general rule, an employer, when faced with a failure of theemployee to abide by the terms of an agreement, is free to ignore the breach of the terms ofemployment or to hold the employee accountable for violating the terms and conditions of anemployment contract. If the employer then discharges the claimant, the issue of whether anysingle violation of the terms and conditions of an employment contract amounts to substantialfault connected with work under G.S. §96-14(2A) or misconduct connected with work underG.S. §96-14(2) is a matter to be decided on a case by case basis.

DISCUSSION

This Commission has no position on the appropriateness of any specific employmentarrangements between a temporary assignment employee and the temporary personnel serviceemployer. The parties are free to engage in any lawful employment arrangements, terms,conditions or contracts as they may so choose.

There is no evidence in the record that either party was required or obligated tomaintain the employment relationship for any certain period. In other words, the parties werefree to break off their employment relationship at any time.

However, in this case, the Commission never reaches the issues of discharge from workor leaving work because there was no separation from employment. Neither the claimant nor theemployer broke the employment relationship. Based on the facts of this case, there is no basis toconclude there was any separation. It appears that the Commission should not have raised aseparation issue in the first place. As stated in her testimony, the claimant filed her claim,"...because the work had been real slow, and I just could not do anything else financially exceptto try to do this [file a claim]." Appeals hearing transcript p 5. This testimony does not supporta conclusion that there had been a separation. Wright v. Bus Terminal Restaurant, 71 N.C. App.395, 322 S.E.2d 201 (1984).

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IN RE BROWNPage Four of Four

The Commission will take this opportunity to address a related situation. When aclaimant stops performing an assignment before that assignment ends, there is no separationunless the employer or the claimant treat the event as a separation. Unless the parties presentfacts to the Commission showing the employment relationship has ended, there is no basis forthe Commission to assume and presume that the employment relationship has ended.

Based on the competent evidence in the record and the Commission's Findings of Factsbased upon that record, it is concluded that the claimant was not separated as contemplated underG.S. §96-14(1),(2), or (2A). It is further concluded that the claimant was unemployed under G.S.§96-8(10)a.

DECISION:

IT IS NOW, THEREFORE, ORDERED, ADJUDGED AND DECREED that thedecision of the Appeals Referee is REVERSED, and the CLAIMANT IS NOTDISQUALIFIED for unemployment insurance benefits.

98



IN RE FALLIN(Adopted April 30, 1997)

This cause has come on before the undersigned pursuant to N.C.G.S. §96-15(e), toconsider the EMPLOYER'S APPEAL from a DECISION by Appeals Referee Betsy Loyttyunder APPEALS DOCKET NO. IV-A-16898. Having reviewed the record in its entirety, theundersigned is of the opinion that the aforesaid decision must be vacated and remanded to takeadditional evidence and to issue a new decision.

The claimant and the employer shall be provided with a copy of the transcript of thehearing not later than the date the Appeals Referee mails notice of the remanded hearing.

The record in this case is deficient. While not clear, it appears that the claimant securedemployment at $8.00 per hour with a client of Mid-Carolina Temporary Services, Inc. and theclient sent the claimant to Mid-Carolina and used Mid-Carolina as a payroll service. Claimantbegan work for the client of the employer on October 24, 1996 and claimant's last day of workwas November 18, 1996. The client was apparently a company called Aquatics though that is notclear from the record. Apparently on November 22, 1996, claimant was offered an assignment bythe employer starting at $5.96 per hour in the shipping department of a client. Claimant refusedthat assignment and filed an Additional Initial Claim (AIC) on November 26, 1996 effectiveNovember 17, 1996. The terms and conditions of claimant's employment with the employer arenot known. Any requirements placed on claimant by the employer and made known to theclaimant are not known. The specifics as to how claimant became an employee of this employerare not known.

The issues cited in the Notice of Hearing before the Appeals Referee were whether or notclaimant failed without good cause to apply for available suitable work or failed without goodcause to accept available suitable work under G.S. §96-14(3)(i) or (ii). The case is properlydecided under G.S. §96-14(l). Temporary personnel service employers (equivalent to privatepersonnel service employers as defined in G.S. §95-47.1) are treated as any other employerunder the Employment Security Law. An employee of a temporary personnel service employerwhose assignment has ended and who is offered another assignment prior to filing a New InitialClaim (NIC) or an Additional Initial Claim (AIC) for unemployment insurance benefits whodoes not accept the assignment and files a claim shall be treated as a quit under G.S. §96-14(l).Whether or not claimant quit with good cause attributable to the employer shall depend onwhether or not the new assignment is suitable work. In determining whether or not the newassignment is suitable work, Commission Precedent Decision No. 19, In re Tyndall, shall beapplied.

An individual employed by a temporary personnel service employer who files a NIC orAIC for unemployment insurance benefits after an assignment has ended or after he is notpermitted to return to an assignment and prior to an offer of another assignment shall not be

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IN RE FALLINPage Two of Three

considered separated from employment under G.S. §96-14(l), (2), (2A) or (2B), but shall bedeemed unemployed in accordance with G.S. §96-8(10)a. and b., unless the claimant has beendischarged. If claimant has been discharged, then claimant's qualifications to receive benefitsshall be determined in accordance with G.S. §96-14(2), (2A) or (2B).

For any week when a claimant is receiving benefits under G.S. §96-8(10)a. or b. and failsto work all the work her/his temporary personnel service employer has made available to theclaimant, the claimant's eligibility to receive benefits shall be decided under G.S. §96-13(a).

When a separated individual in claims status refuses an offer of work or an assignment bythe temporary personnel service employer or any employer, the refusal shall be decided underG.S. §96-14(3). In a case decided under G.S. §96-14(3), once an employer or the Commission,whichever is appropriate, shows that offered work is suitable work, then the claimant has theburden of showing that he failed to accept the work with good cause.

In a case involving a temporary personnel service employer, as in a case involving anyother employer, if a claimant quits work, the claimant has the burden of showing that he/she quitwith good cause attributable to the employer. In a case where a claimant is discharged, theemployer has the burden of showing that the claimant was discharged for a disqualifying reason.In deciding a case under G.S. §96-14(l), (2), (2A), (2B) or (3), such items as a written agreementbetween the employer and the employee, written instructions to the employee, the application foremployment, and/or oral agreements or oral instructions are relevant and pertinent evidence.

Every decision of an Appeals Referee shall contain the entire procedural history of thematter, including orders of continuance and remand. When a hearing is remanded, the findings offact made by the Referee shall state the procedural posture of the case including the reason forthe remand, the requirements of the remand order, and the parties appearing at each of thehearings when an additional hearing is ordered. Further, it is inappropriate and usually reversibleerror for the Appeals Referee to merely recite the previous findings. Certainly, the AppealsReferee can incorporate previous findings into the new decision in the interest of judicialeconomy, but additional findings must be made when ordered in accordance with the order ofremand. It should be evident from an Appeals Referee's decision following an order of remandto take additional evidence and render a new decision that the Referee heard and considered theadditional evidence and complied with the remand order.

IT IS NOW, THEREFORE, ORDERED, ADJUDGED AND DECREED that thedecision of the Appeals Referee is SET ASIDE and the cause is hereby REMANDED forfurther proceedings consistent with this decision. No overpayment is established of benefits paidpursuant to the decision of the Appeals Referee. G.S. §96-9(c)(2)b, last paragraph.

IT IS ALSO ORDERED that all interested parties shall be duly notified as to time andplace for rehearing, and the Appeals Referee shall identify the new decision at the conclusion ofthe remanded hearing by using all previously assigned docket numbers.

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IN RE FALLINPage Three of Three

IT IS ALSO ORDERED that all documents contained in the record transmitted to theAppeals Referee with this decision, including the appeal and all other correspondence ordocuments by whatever name or designation, shall be marked as exhibits and entered into therecord by the Appeals Referee on remand in order that the record will be complete as required bylaw and ESC Regulation 14.19.

IT IS ALSO ORDERED that a decision in this matter shall be mailed within 30 daysfrom the date the remanded record is received by the Appeals Department, unless an extension isgranted in writing by the Chief Appeals Referee and made part of the record.

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101



IN RE TEACHEY(Adopted May 10, 1999)

Pursuant to N.C.G.S. §96-15(e), this cause has come on before the Commission toconsider the EMPLOYER'S APPEAL from a decision by Appeals Referee Milford K. Kirbyunder Appeals Docket No. VIII-A-09591. The employer requested oral arguments to be held. Anotice of oral arguments, scheduled to be held on February 25, 1999, was mailed to all interestedparties on February 8, 1999. When the matter came on to be heard, appearing and presentingoral arguments were: Harley H. Jones, attorney for the employer.

The record evidence has been reviewed in its entirety. All written and oral argumentshave been considered.

G.S. §96-15(i) requires that findings of fact found by the Commission to be supportedby competent evidence. ESC Regulation No. 14.25(C) makes this same requirement applicableto findings of fact made by the Appeals Referee. Pursuant to G.S. §96-15(f), the Commissionhas promulgated procedures by which such competent evidence may be presented at hearings.

In cases involving "a drug related separation from work", the Commission permitscontrolled substance examination results to be deemed proved by affidavit or testimony from thetesting laboratory. The affidavit or testimony must show that the controlled substanceexamination from which the results were derived met all statutory procedural requirements. Theaffidavit or testimony also must explain what the results mean.

What are the procedural requirements of a controlled substance examination (test)?Under G.S. §95-232, the required procedures are:

1. Collection of samples for examination or screening under reasonable and sanitaryconditions and in a manner reasonably calculated to prevent substitution of samples andinterference with the collection, examination, or screening of samples;

2. Use of approved laboratories for screening and/or confirmation of samples;

3. Confirmation of any sample that produces a positive result by a second examination ofthe sample utilizing gas chromatography with mass spectrometry or an equivalentscientifically accepted method;

4. Retention by the screening and/or confirmation laboratory of a portion of everysample that produces a confirmed positive examination for a period of 90 days from thetime the results of the confirmed positive examination are mailed or otherwise deliveredto the examiner;

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IN RE TEACHEYPage Two of Four

5. Establishment by the examiner or its agent of a chain of custody for sample collectionand examination to ensure proper record keeping, handling, labeling, and identification ofexamination samples; and

6. Making confirmed positive samples available to the affected examinee or his/heragent, within the retention period, if the examinee elects to have the samples retested athis/her own cost.

To make it convenient to present testimony as to the results of the controlled substanceexamination, the Commission allows the personnel of the testing laboratory to participate andtestify in the hearing by way of teleconference means, although the original hearing may bescheduled to be conducted in-person. ESC Regulation No. 14.18, in pertinent part, provides:

(O) When a party desires to introduce documents, affidavits or statements at a hearing,that party must provide an authenticated copy plus one copy of each exhibit for the use ofthe Appeals Referee and a copy for each party to the proceeding.

The notice of hearing in a case involving a "drug related separation from work'informs the parties of the type of proof that would be necessary and the availability of theteleconference means if a party desired to present this proof through testimony from witnesses.The notice further states:

At the hearing you will need to bring documentary evidence and/or witnesses to prove ordisprove any test and its results that had a part in the separation from work, along withany applicable work rules.

. . .If you have documents which you wish to be considered, you must bring them to thehearing. Please bring the original document and two copies.

In the present case, the claimant was discharged from employment because theemployer had reason to believe that the claimant tested positive for a controlled substance. TheAppeals Referee found as a fact that the "claimant's drug test was positive for cannabinoids." Atno time has the claimant denied that the controlled substance examination results were positive.His argument, as presented at the hearing before the Appeals Referee, centered around how thecontrolled substance came to be present in his body; i.e., "second-hand" inhalation of the drugrather than use of the drug.

The employer argues that the employer did not know of the proof requirement in casesinvolving drug related separation from work, and therefore is entitled to a remand to present suchproof at another hearing. In the alternative, the employer argues that "too high a burden" isplaced on the employer "by requiring an affidavit or testimony from the testing laboratory inorder to prove misconduct connected with work relating to a positive drug test." The employeralso argues that since the claimant did not deny that the results were positive, an affidavit ortestimony from the testing laboratory was unnecessary and the positive results should have beendeemed to have been proved.

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Commission Exhibit 8, the Notice of Hearing mailed to all interested parties onDecember 18, 1998, clearly shows that the employer knew or should have known of the type ofproof required in a case involving a drug related discharge from work and how such proof couldbe presented. Furthermore, the Appeals Referee, during the January 7, 1999 hearing, offered theemployer an opportunity to have the hearing continued in order that the employer could arrangeto obtain the necessary proof. The employer declined this opportunity. Accordingly, theCommission finds the employer's argument on this ground to be unpersuasive and without merit.

In view of the statutory and regulatory requirement that findings of fact be supportedby competent evidence, the Commission is of the opinion that the methods by which drug testresults are to be deemed proved at hearings before the Appeals Referee are not burdensome.They are the most convenient and least intrusive methods of proof.

The employer further argues that Employer Exhibit 2 at page 3 (drug test resultsreport) shows that a confirmation of the positive sample was conducted by a second examinationof the sample utilizing gas chromatography with mass spectometry. The Appeals Referee foundas a fact that "there is no evidence that the positive test result was confirmed by a second testutilizing gas chromatography with mass spectrometry." This finding was apparently based onthe testimony of the employer witness that she had evidence only as to one test in response to theAppeals Referee's question: "Was a positive result confirmed by a second test using gaschromatography with mass spectrometry?" The employer argues that its witness misunderstoodthe question and thought the Appeals Referee was referring to a test that the claimant could havehad done at his own cost. This failure of the employer witness to understand the question andtestify accordingly showed the necessity of having an affidavit or testimony from the testinglaboratory. Because the record is absent any showing of him having expertise in this field, theAppeals Referee properly refrained from attempting to interpret the meaning of the terms andabbreviations appearing on the drug test results report. Accordingly, the Commission concludesthat the Appeals Referee did not commit error in finding that no confirmation examination hadbeen conducted.

The employer's Substance Abuse Policy, Employer Exhibit 1, is premised on the "use"of abused substances by employees and job applicants. The claimant, who did not deny that hisdrug test was positive for cannabinoids, did deny using drugs. He blamed the presence of thedrug in his system on his "second-hand" inhalation of marijuana smoke that was present at asocial gathering that he attended. This reason is uncontroverted since the employer presented, bytestimony or affidavit, no expert evidence explaining what the positive results meant. That is, itis unknown from the drug test results report whether the levels found in the claimant's systemestablished the "use" of the drug rather than "second-hand" inhalation as asserted by theclaimant. This failure of the employer witness to make this distinction showed the necessity ofhaving an affidavit or testimony from the testing laboratory explaining what the positive resultsmeant.

Is the employer entitled to another hearing in order that it may present additionalevidence? When a party has had a hearing with the opportunity to present and refute any

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evidence and chooses not to call certain witnesses, the party is not entitled to a rehearing becausethe party has been accorded procedural due process. Douglas v. J. C. Penney Company, 67N.C.App. 344, 313 S.E.2d 176 (1984). Where there is evidence in the record that supports aconclusion on a material issue, the Commission may not grant an employer more than oneopportunity to produce other evidence to prove that a claimant is disqualified from receivingunemployment insurance benefits. To do otherwise, would allow employers repeatedopportunities to meet their burden of proving that an employee should be disqualified.Dunlap v. Clarke Checks, Inc., 92 N.C.App. 581, 375 S.E.2d 171 (1989).

The Commission concludes that the employer was afforded procedural due processand had a reasonable opportunity to present all relevant and material evidence to prove its case.Also, the Commission concludes that the record contains sufficient evidence to supportconclusions as to all material issues. Accordingly, the employer is not entitled to another hearingto present additional evidence in this matter.

Pursuant to the statutory authority of the Commission to "affirm, modify, or set asideany decision of an appeals referee on the basis of the evidence previously submitted, or direct thetaking of additional evidence", IT IS NOW, THEREFORE, ORDERED, ADJUDGED ANDDECREED that the employer's request for a rehearing be, and the same, is DENIED, and theattached decision by the Appeals Referee is AFFIRMED and ADOPTED as the decision of theCommission.

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105



IN RE MARLOW(Adopted May 17, 1999)

[In re Marlow, decided by the North Carolina Court of Appeals, holds that sexual harassment in theworkplace by a supervisor constitutes "good cause attributable to the employer" for leaving workunder N.C.G.S. §96-14(1). This case further holds that if sexual harassment by a supervisor isproven by the claimant/employee, mere failure of the claimant/employee to report the sexualharassment pursuant to the employer's grievance policy does not, in itself, disqualify theclaimant/employee from receiving unemployment insurance benefits. Discretionary review denied byN.C. Supreme Court: 347 N.C. 577, 402 S.E.2d 595 (1998)]

REBECCA L. MARLOW, Petitioner-Appellant,v.

NORTH CAROLINA EMPLOYMENTSECURITY COMMISSION, Respondent-Appellee.

COURT OF APPEALS OF NORTH CAROLINA127 N.C.App. 734; 493 S.E.2d 302 (1997)

Opinion by: John, Judge

Petitioner appeals the trial court's order affirming decisions of the Employment SecurityCommission of North Carolina (the Commission) and the Appeals Referee denying her claim forunemployment benefits. We reverse the trial court.

The underlying facts are essentially uncontroverted and pertinent portions are set out in thefindings of fact of the Appeals Referee as follows:

1. [Petitioner] worked for Carpenter Decorating Company . . . as a machineoperator. . . . . . . .3. [She] left this job because her immediate supervisor made repeated sexualcomments to her in the workplace over a period of several years up until [hertermination]. [Petitioner] was offended and intimidated by the supervisor'sbehavior and told him to stop it, but he never did. . . .4. The supervisor's behavior amounted to sexual harassment. . . .5. [The] employer's policy, known to [petitioner] at the times in question,prohibited sexual harassment and required that it be reported to uppermanagement if the harasser was the direct supervisor.

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6. [Petitioner] never reported the sexual harassment to any management over theimmediate supervisor because she thought that she would not be believed . . . .

The Appeals Referee further found that "by failing to report the sexual harassment to uppermanagement before leaving the job, [petitioner] denied employer the opportunity to solve theproblem." Based upon the foregoing findings, the Appeals Referee concluded petitioner'stermination of employment was not for good cause attributable to her employer, and denied herclaim for unemployment benefits. On 9 April 1996, the Commission affirmed and adopted as itsown the decision of the Appeals Referee. Petitioner sought judicial review 24 April 1996 inCatawba County Superior Court, which affirmed the Commission 20 August 1996. Petitionerfiled notice of appeal to this Court 16 September 1996.

Upon leaving her position at Carpenter Decorating Company (CDC), petitioner filed forunemployment benefits pursuant to the Employment Security Act (the Act), codified at N.C.G.S.§ 96-1 et seq. (1995). The Act is to be liberally construed in favor of applicants. Eason v. Gould,Inc., 66 N.C. App. 260, 263, 311 S.E.2d 372, 374 (1984), aff'd, 312 N.C. 618, 324 S.E.2d 223(1985). Further, in keeping with the legislative policy to reduce the threat posed byunemployment to the "health, morals, and welfare of the people of this State," N.C.G.S. § 96-2(1995), statutory provisions allowing disqualification from benefits must be strictly construed infavor of granting claims. Barnes v. The Singer Co., 324 N.C. 213, 216, 376 S.E.2d 756, 758(1989).

The statutory disqualification provision applicable to the case sub judice is N.C.G.S. § 96-14(1)(1995), which states, inter alia:

An individual shall be disqualified for benefits . . . if it is determined by theCommission that such individual is, at the time [his] claim is filed, unemployedbecause he left work without good cause attributable to the employer.

Petitioner has consistently maintained she terminated employment with CDC because of sexualharassment by her immediate supervisor, and, indeed, the Appeals Referee found as a fact thather "supervisor's behavior amounted to sexual harassment of [petitioner]." Consequently,petitioner continues, she left for "good cause attributable to the employer" and was not, as aresult, disqualified from receipt of unemployment benefits by G.S. §96-14(1).

An employee who terminates employment for "good cause" leaves for a reason "that would bedeemed by reasonable men and women as valid and not indicative of an unwillingness to work."Watson v. Employment Sec. Comm'n., 111 N.C. App. 410, 413, 432 S.E.2d 399, 401 (1993). Itcannot be contested that sexual harassment in the workplace constitutes good cause under G.S.§96-14(1) for leaving employment, and the Commission has advanced no argument to thecontrary. See Phelps v. Vassey, 113 N.C. App. 132, 137, 437 S.E.2d 692, 695 (1993) ("the public

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policy of North Carolina must be to stop sexual harassment in the work place"), and In reBolden, 47 N.C. App. 468, 471, 267 S.E.2d 397, 399 (1980) (had claimant "left her job becauseof racial discrimination practiced against her by her employer, she would have had good causeattributable to her employer and so would not have been disqualified for benefits"); see alsoHoerner Boxes, Inc. v. Mississippi Employment Sec. Com'n, 693 So. 2d 1343, 1348 (Miss.1997)("sexual harassment in the work place constitutes good cause for voluntarily leavingemployment in the context of unemployment compensation benefit claims").

Moreover, the Commission, in asserting that the trial court ruled properly and in responding topetitioner's argument to this Court, does not focus upon imputation to CDC of the supervisor'sactions in sexually harassing petitioner. See Martin v. Cavalier Hotel Corp., 48 F.3d 1343,1350-52 (1995) (where supervisor's sexual misconduct occurred "in the workplace, duringworking hours, on an employee whom he had authority to hire, fire, promote, and discipline,"supervisor acted within scope of his employment such that employer is vicariously liable inaction grounded on supervisor's actions); Hogan v. Forsyth Country Club Co., 79 N.C. App.483, 492, 340 S.E.2d 116, 122, disc. review denied, 317 N.C. 334, 346 S.E.2d 140 (1986)("'designation "manager" implies general power and permits a reasonable inference that he wasvested with the general conduct and control of defendant's business . . ., and his acts are, whencommitted in the line of his duty and in the scope of his employment, those of the company'")(quoting Gillis v. Great Atlantic & Pacific Tea Co., 223 N.C. 470, 474, 27 S.E.2d 283, 285(1943)).

Rather, the Commission, in arguing petitioner's termination of employment was not for goodcause attributable to CDC, points in the main to findings of the Appeals Referee that CDC wasnever advised by petitioner of the supervisor's actions notwithstanding CDC's policy againstsexual harassment, and that petitioner's "failure to report the sexual harassment to uppermanagement before leaving the job . . . denied [CDC] the opportunity to solve the problem."Accordingly, the Commission asserts, the trial court properly affirmed the determination of theAppeals Referee that plaintiff's leaving employment at CDC was not attributable to heremployer:

The facts in this unemployment case do not show this employer was at fault sinceit had a policy prohibiting sexual harassment and did not know that the claimanthad been sexually harassed since she did not follow the employer's reasonablepolicy that required reporting it to the "upper management."

The Commission's argument is unfounded.

An earlier decision of this Court, In re Werner, 44 N.C. App. 723, 725, 263 S.E.2d 4, 6 (1980),squarely resolved the question of whether an employee's failure to seek redress under the

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employer's grievance procedure rendered her departure without good cause attributable tothe employer. In Werner, we affirmed the trial court's ruling that as a matter of law,claimant's failure to use the grievance machinery did not render the separation voluntaryor without good cause attributable to the employer. Werner, 44 N.C. App. at 728, 263S.E.2d at 7. In reaching this holding, we examined the legislative intent behind enactment ofG.S. §96-1 et seq.:

Although the General Assembly could have, by statute, disqualified all suchemployees who do not exhaust the employer's grievance machinery, it has notdone so. The disqualifying provisions of G.S. 96-14 are to be construed strictly infavor of the claimant . . . . It therefore would not be consistent with the publicpolicy of our State, as expressed in G.S. 96-2 or the opinions [*738] of our courts,to disqualify from benefit eligibility such employees for not availing themselvesof the employer's grievance machinery.

Id. (citation omitted).

The holding of Werner is precisely on point with the facts herein: petitioner's mere failure toreport sexual harassment pursuant to her employer's grievance policy did not, in itself, disqualifyher from unemployment benefits eligibility. See also In re Clark, 47 N.C. App. 163, 167, 266S.E.2d 854, 856 (1980) (citing Werner for holding that employee terminating employment forgood cause attributable to employer is not, in order to preserve employee's claim forunemployment benefits, obligated to attempt resolution of the conflict prior to leaving).Petitioner's failure to report her supervisor's misconduct having been the basis for theCommission's denial of her unemployment benefits claim, the trial court erred in affirming theCommission. Construing the relevant disqualifying provisions strictly and in favor of grantingpetitioner's claim, Barnes, 324 N.C. at 216, 376 S.E.2d at 758, we hold that petitioner, under thecircumstances sub judice, left employment with CDC for good cause attributable to heremployer. See Werner, 44 N.C. App. at 728, 263 S.E.2d at 7, and Clark, 47 N.C. App. at 167,266 S.E.2d at 856.

Based on the foregoing, the order of the trial court is reversed and this case remanded to that courtfor further remand to the Commission with instructions to ascertain the period of petitioner'sentitlement to unemployment benefits and thereupon to award her the appropriate amount thereof.

Reversed and remanded.

Judges LEWIS and SMITH concur.******************************************************************************

109


PRECEDENT DECISION NO. 36IN RE BRIGHT

(Adopted November 17, 2003)

STATEMENT OF CASE:

The claimant filed a NEW INITIAL CLAIM (NIC) for unemployment insurance benefitseffective July 20, 2003. Thereafter, the Employment Security Commission determined that theweekly benefit amount payable to the claimant was $408.00 and, during the benefit yearestablished by the claimant, the maximum amount of unemployment insurance benefits payableto the claimant was $10,608.00.

The claim was referred to an adjudicator on the issue of separation from last employment.Adjudicator Joe Manley issued a determination under Docket No. 4019-95 finding the claimantnot eligible for benefits. The claimant filed an appeal from the determination and the mattercame on to be heard by a Hearing Officer under Appeals Docket No. V-A-36848. The followingindividuals appeared at the hearing before the Hearing Officer: Yvonne L. Bright, the claimant.On September 10, 2003, Charlotte A. Dover, Hearing Officer, issued a decision finding theclaimant not eligible to receive unemployment insurance benefits pursuant to G.S. §96-8(10)a.and b. The CLAIMANT has APPEALED.

FINDINGS OF FACT:

1. The claimant has filed continued claims for unemployment insurance benefits for theperiod July 20, 2003 through August 2, 2003. The claimant has registered for work with theCommission, has continued to report to an employment office of the Commission and has madea claim for benefits in accordance with G.S. §96-15(a).

2. The claimant began working for the employer on or about October 1, 1995, and wascontinuing to work for the employer at the time of the hearing before the Hearing Officer.

3. During the weeks ending July 26 and August 2, 2003, the claimant was attached to theemployer’s payroll.

4. The claimant began working for the employer while engaged in full-time employmentwith International Paper Company, Inc., where she had worked since 1968. The claimant’s full-time job was her primary employment.

5. The claimant has worked for the employer on a part-time basis. She customarilyaverages 12 hours per week, but was not guaranteed any set number of hours duringemployment. Her work hours have fluctuated depending on the needs of the employer’s ESCusiness and the economy, which means that she has worked more than 12 hours per week whencalled in to help with inventory or to cover for other employees on vacation. There have beenweeks, particularly since September 11, 2001, when she has worked less than 12 hours per week.The claimant understood from the employer that her reduced hours during those weeks werebecause of the economy.

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6. The claimant continued to work for both the employer and for International PaperCompany, Inc., until she was separated from the latter employment on March 28, 2002

7. The claimant received a “pay-out” package as a result of her separation from employmentwith International Paper Company, Inc.

8. The claimant continued to work for the employer on a part-time basis following herseparation from International Paper Company, Inc., and filed a claim for unemploymentinsurance benefits effective July 20, 2003, after the funds that she received from her “pay-out”package from International Paper Company, Inc. were exhausted.

MEMORANDUM OF LAW:

The Employment Security Law of North Carolina provides that for the purpose ofestablishing a benefit year, an individual shall be deemed to be unemployed:

1. If he has payroll attachment but, because of lack of work during the payrollweek for which he is requesting the establishment of a benefit year, he workedless than the equivalent of three customary scheduled full-time days in theestablishment, plant, or industry in which he has payroll attachment as aregular employee. If a benefit year is established, it shall begin on the Sundaypreceding the payroll week ending date.

2. If he has no payroll attachment on the date he reports to apply forunemployment insurance. If a benefit year is established, it shall begin on theSunday of the calendar week with respect to which the claimant met thereporting requirements provided by Commission regulation.

G.S. §96-8(10)a.

The Employment Security Law of North Carolina provides that, for benefit weeks withinan established benefit year, a claimant shall be deemed to be:

1. Totally unemployed, irrespective of job attachment, if his earnings for suchweek, including payments defined in subparagraph c below, would not reducehis weekly benefit amount as prescribed by G.S. 96-12(c).

2. Partially unemployed, if he has payroll attachment but because of lack ofwork during the payroll week for which he is requesting benefits he workedless than three customary scheduled full-time days in the establishment, plant,or industry in which he is employed and whose earnings from suchemployment (including payments defined in subparagraphs c below) wouldqualify him for a reduced payment as prescribed by G.S. 96-12(c).

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IN RE BRIGHTPage Three of Four

3. Part-totally unemployed, if the claimant had no job attachment during all orpart of such week and whose earnings for odd jobs or subsidiary work(including payments defined in subparagraph c below) would qualify him fora reduced payment as prescribed by G.S. 96-12(c).

G.S. §96-8(10)b.

The Employment Security Law of North Carolina also provides that:

No individual shall be considered unemployed if, with respect to the entirecalendar week, he is receiving, has received, or will receive as a result of hisseparation from employment, remuneration in the form of (i) wages in lieu ofnotice, (ii) accrued vacation pay, (iii) terminal leave pay, (iv) severance pay,(v) separation pay, or (vi) dismissal payments or wages by whatever name.

G.S. §96-8(10)c.

CONCLUSIONS OF LAW:

In the present case, the Hearing Officer erred by concluding that the claimant was notunemployed within the meaning of the law. The work the claimant performed for the employerwas in the nature of subsidiary work. It was secondary employment that the claimant continuedto perform after the loss of her primary job. Employment Security Commission of NorthCarolina Interpretation No. 256, Supplement I, states that, “ [a] person who continues to workpart-time in secondary employment after losing a primary job is ordinarily part-totallyunemployed because of the loss of the primary job.”

Paragraph C.3. of the interpretation, which deems that a person is not unemployed whenthe person continues to work part-time and waits 2 months or more after losing a full-time jobbefore filing a claim for benefits, does not apply when the reason the person waited to file theclaim was because he was receiving as a result of his separation from employment, and as setforth in G.S. §96-8(10)c., remuneration in the form of (i) wages in lieu of notice, (ii) accruedvacation pay, (iii) terminal leave pay, (iv) severance pay, (v) separation pay, or (vi) dismissalpayments or wages by whatever name. The claimant, in the present case, waited to file herclaim for benefits because she was in receipt of separation pay.

The Commission concludes from the competent evidence and the facts found therefromthat the claimant was part-totally-unemployed under G.S. §96-8(10)b.3. during the weeksending July 26 and August 2, 2003. The Commission further concludes that the claimant’sseparation from employment with International Paper Company, Inc., raises the issue ofwhether the claimant is disqualified from receiving unemployment insurance benefits underG.S. §96-14 et seq. based on her separation from last employment.

Based on the foregoing, the decision of the Hearing Officer must be reversed. Further,the claimant must be held eligible to receive unemployment insurance benefits for the weeksending July 26 and August 2, 2003. The issue of whether the claimant is disqualified fromreceiving benefits based on her separation from last employment with International PaperCompany, Inc. is remanded to the Wilmington office of the Commission for fact finding and, ifnecessary, adjudication.

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IN RE BRIGHTPage Four of Four

DECISION:

The decision of the Hearing Officer is REVERSED.

The claimant is ELIGIBLE to receive unemployment insurance benefits for the weeksending July 16 and August 2, 2003, provided all other requirements of the law have been met.

The issue of whether the claimant is disqualified from receiving unemploymentinsurance benefits based on her separation from employment with International PaperCompany, Inc., is REMANDED to the Wilmington office of the Commission for furtherproceedings consistent with this decision.*****************************************************************************

113



IN RE HEENAN(Adopted November 16, 2005)

STATEMENT OF CASE:

The claimant filed a NEW INITIAL CLAIM (NIC) for unemployment insurance benefitseffective April 3, 2005. Thereafter, the Employment Security Commission determined that theweekly benefit amount payable to the claimant was $426.00 and, during the benefit year establishedby the claimant, the maximum amount of unemployment insurance benefits payable to the claimantwas $11,076.00.

The claim was referred to an adjudicator on the issue of separation from employment.Adjudicator Kaye Powell issued a determination under Docket No. 42476-O finding the claimantdisqualified from receiving unemployment insurance benefits under N.C.G.S. S§96-14(1). Theclaimant filed an appeal from the determination and the matter came on to be heard and was heard byan Appeals Referee under Appeals Docket No. O-L-10115. When the matter came on to be heard, thefollowing individuals appeared and/or presented testimony: Jack T. Heenan, the claimant; Bill Wise,witness for the claimant; Michael G. Okun, attorney for the claimant; Mike Annan, Hub Manager forAircraft Maintenance, and Tim Conlon, Manager of Maintenance Administration, witnesses for USAirways, Incorporated (hereinafter "employer"); and Gregg Hogan, legal representative for theemployer. On June 27, 2005, Joseph D. Pearlman, Appeals Referee, issued Appeals Decision No. O-L-10115 holding the claimant disqualified from receiving benefits under G.S. §96-14(1). TheCLAIMANT APPEALED and requested oral arguments before the Commission.

With prior written notice mailed to the parties on July 19, 2005, the Full Commissionconducted a proceeding on August 29, 2005, at which oral arguments on points of law were presented.Appearing and presenting oral arguments were Michael G. Okun, attorney for the claimant, and GreggHogan, legal representative for the employer. The Full Commission reviewed and considered therecord on appeal and any written and oral arguments presented; thereafter, the full Commissiondirected the issuance of the decision as set forth below.

FINDINGS OF FACT:

1. The claimant filed continued claims for unemployment insurance benefits for the periodfrom April 3, 2005 through April 16, 2005. He registered for work with the Employment SecurityCommission (ESC), continued to report to an ESC office and made a claim for benefits in accordancewith G.S. §96-15(a).

2. The claimant began working for the employer in September 1981. He last worked for theemployer on or about March 27, 2005 as a line utility worker. The employer is involved in airline

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transportation. The claimant worked from 6:30 a.m. to 3:00 p.m. On a weekly basis, he commutedfrom his residence in Roanoke, Virginia to his job site in Charlotte, North Carolina.

3. Due to severe financial and economic conditions, the employer took action that adverselyaffected the terms under which the claimant was employed. By notice dated February 18, 2005, theemployer informed the claimant that his position as a line utility worker had been abolished. Theemployer outsourced the claimant's job, which meant the claimant's job was eliminated from theemployer's job classification structure. [The claimant was afforded an opportunity to exercise hisseniority to obtain a base utility position at an hourly wage of $14.75.] The employer contracted withanother entity to perform the line utility work. Upon application of the employer, a federalbankruptcy court voided the claimant's union collective bargaining agreement. His pension plan wasterminated on January 6, 2005. The holidays and vacation days in his benefit plan were reduceddrastically. The reduction in the claimant's hourly wage from $17.47 to $14.75 became permanentafter February 2005. [Under an order signed by a federal judge, the employer had been allowed totemporarily reduce the claimant's hourly wage in this manner from October 2004 until February2005.]

4. As a direct result of the adverse actions as described in the foregoing paragraph, theclaimant decided to terminate his continued employment with the employer. The claimant filing anapplication for inclusion in the employer's "Voluntary Separation Program" implemented thisdecision. The employer accepted the claimant's application because his separation would allow anindividual with less seniority to continue his/her employment with the employer and reduce thenumber of individuals that the employer would have to involuntarily layoff to meet its financialsolvency goal. The claimant signed the General Release under this Program on March 23, 2005.

MEMORANDUM OF LAW:

The Employment Security Law of North Carolina provides that an individual shall bedisqualified for benefits for the duration of his unemployment beginning with the first day of the firstweek after the disqualifying act occurs with respect to which week an individual files a claim forbenefits if it is determined by the Commission that such individual is, at the time such claim is filed,unemployed because (s)he left work without good cause attributes to the employer. G.S. §96-14(1).

G.S. §96-14(1c) states:

Where an individual leaves work due solely to a unilateral and permanentreduction in his rate of pay of more than fifteen percent (15%), said leaving shallconstitute good cause attributable to the employer for leaving work. Providedhowever that if said reduction is temporary or was occasioned by malfeasance,misfeasance ornonfeasance on the part of the individual, such reduction in pay shall not constitutegood cause attributable to the employer for leaving work.

“Good cause’ has been interpreted by the courts to mean a reason which would be deemed byreasonable men and women valid and not indicative of an unwillingness to work. Sellers v. National

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Spinning Company, Incorporated, 64 N.C.App. 567, 307 S.E.2d 774 (1983), disc. rev. denied, 310 N.C. 153,311 S.E.2d 293 (1984); In re Clark, 47 N.C.App. 163, 266 S.E.2d 854 (1980). “Attributable to theemployer” as used in G.S. §96-14(1) means produced, caused, created, or because of actions by theemployer. Sellers, 64 N.C.App. 567; In re Vinson, 42 N.C.App. 28, 255 S.E.2d 644 (1979). Theclaimant has the burden of proving that (s)he is not disqualified for benefits under G.S. §96-14(1);G.S.§96-14(1A) In re Whicker, 56 N.C.App. 253, 287 S.E.2d 439 (1982). When this burden is notcarried, G.S. §96-14(1) mandates that the claimant is held disqualified from receiving benefits.

CONCLUSIONS OF LAW:

In the present case, the competent and credible evidence contained in the hearing recordsupports the facts as found by the Commission. The Commission concludes from the competent andcredible evidence and the facts found therefrom that the claimant left work with good cause attributableto the employer. The Appeals Referee erred when he failed to distinguish between the decision to quitand how the decision was implemented. That is, the claimant's decision to quit his employment wasmade because of the adverse changes in his employment terms. The employer provided a method (the"Voluntary Separation Program") by which the claimant could communicate and implement hisdecision to quit. The permanent and unilateral reduction in the claimant's hourly wage, standing alone,met the definition of good cause attributable to the employer for leaving work as defined in G.S. §96-14(1c). In addition, all of the adverse actions, considered as a whole, met the general definition of goodcause attributable to the employer for leaving work. The Appeals Referee again erred in only applyingthe statutory provision related to the permanent and unilateral reduction in the claimant's hourly wage.

Based on the foregoing, Appeals Decision No. O-L-10115 must be reversed. Furthermore, theclaimant must be held not disqualified from receiving unemployment insurance benefits.

DECISION:

IT IS NOW, THEREFORE, ORDERED, ADJUDGED AND DECREED that Appeals DecisionNo. O-L-10115 be, and the same is, SET ASIDE, and the claimant is NOT DISQUALIFIED fromreceiving unemployment insurance benefits.

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116



IN RE KOPP(Adopted April 7, 2006)

ORDER

Pursuant to N.C.G.S. §96-15(e), this cause has come on before the Commission toconsider the claimant’s appeal from a decision by Appeals Referee Broxie J. Nelson underAppeals Docket No. VII-A-09218R. The record evidence and any briefs or written argumentstimely submitted have been reviewed in their entirety. The undersigned finds that:

1. The claimant filed a claim for unemployment insurance benefits effective March 20, 2005;

2. On April 9, 2005, a Determination by Adjudicator, Docket No. 38462was issued which held the claimant disqualified for unemploymentinsurance benefits beginning March 20, 2005 based on the claimant’sseparation from last employment with Craven County. The claimantappealed the Determination by Adjudicator on April 18, 2005;

3. The matter was scheduled for a hearing before an Appeals Referee. Thehearing was conducted on June 6 and July 19, 2005. On August 3, 2005,Appeals Decision No. VII-A-09218 was issued by the Appeals Referee.Said decision held the claimant disqualified for unemployment insurancebenefits beginning March 20, 2005. The claimant appealed the decisionand the matter came on before the Commission for review. CommissionDecision No. 05(UI)4180 was issued on September 20, 2005. Saiddecision vacated Appeals Decision No. VII-A-09218 and remanded thematter to the Appeals Referee to conduct an additional appeals hearing torecapture the lost testimony elicited at the July 19, 2005 appeals hearing;

4. The remand hearing was scheduled for October 28, 2005 before anAppeals Referee. On October 25, 2005, the Appeals Department of theEmployment Security Commission received the claimant’s writtenrequest which stated: “I am accepting the decision of the commission tovacate the Appeals Referee decision Mr. Broxie J. Nelson. I am alsowithdrawing my claim for unemployment benefits. I would also like torequest withdraw from the appeals hearing.”; and

5. The remand hearing was conducted on October 28, 2005 by the AppealsReferee. Neither the claimant nor the claimant’s attorney appeared at thehearing. The Appeals Referee acknowledged receipt of the claimant’srequest to withdraw her appeal but did not rule on the claimant’s request.The Appeals Referee reissued Appeals Decision No. VII-A-09218Rwhich held the claimant disqualified from receiving unemploymentinsurance benefits beginning March 20, 2005. The claimant appealed andthe matter came on before the Commission for review.

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Precedent Decision No. 38IN RE KOPPPage Two of Two

A review of the record indicates that the claimant requested withdrawal of her appealand claim for unemployment insurance benefits prior to the scheduled appeals hearing onOctober 28, 2005. The claimant’s request was voluntary made by the claimant and the record isabsent any indication that the claimant’s request was done under coercion or duress. TheAppeals Referee erred when he reissued Appeals Decision No. VII-A-09218R and did not grantthe claimant’s request for withdrawal of her appeal.

It is hereby ORDERED, ADJUDGED AND DECREED that:

1. The claimant’s request to withdraw her appeal of the Determination byAdjudicator, Docket No. 38462 is ALLOWED.

2. Appeals Decision No. VII-A-09218R is hereby VACATED and declaredNULL and VOID

3. The Determination by Adjudicator rendered under Docket No. 38462 is declaredthe FINAL decision of the Commission.

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118



IN RE THE STAFFING ALLIANCE(Adopted February 27, 2007)

Pursuant to N.C.G.S. §96-4(m) and the notice mailed to all parties on June 30, 2005, thiscause has come on to be heard and was heard before the Commission on August 10, 2005, and theEMPLOYER’S exceptions in regards to Tax Opinion No. 3188, mailed April 22, 2005, wereconsidered. Appearing and presenting arguments were: Robert Winfree, the employer's President,and Fred R. Gamin, attorney for the Employment Security Commission. Lynn Salezar, theemployer's Human Resource Manager, and Iris Carmon, ESC Legal Assistant, appeared asobservers.

The undersigned Chairman of the Employment Security Commission (ESC) has consideredall arguments, written and oral. After a careful and thorough reconsideration of the statutory andcase law on involuntary successorship, the undersigned concludes that G.S. §96-9(c)4 was notproperly applied in this case because said provision required The Staffing Alliance (successor) tohave "[succeeded] to or [acquired] all of the organization, trade or business" of Action Labor ofNorth Carolina (predecessor) before it could be involuntarily assigned the tax status and liabilitiesof Action Labor of North Carolina for use in the determination of its rate of unemploymentinsurance contributions, (emphasis added), and the facts and evidence clearly established this wasnot the case.

Only in the "involuntary assignment" of tax status and liabilities section (second paragraphof the cited statutory provision) has the North Carolina General Assembly (hereinafter Legislature")used the term "all of the organization, trade or business." The adjective "all" is defined as "being orrepresenting the entire number, amount or quantity;" "constituting, being or representing the totalextent or the whole;" being the utmost possible of;" and "every." See, The American HeritageCollege Dictionary, Third Edition (1993). The North Carolina Supreme Court held that "words in astatute are to be given their natural, ordinary meaning, unless the context requires a differentconstruction. (Citation omitted)" In re Watson, 273 N.C. 629, 635 (1968). The undersigned is notpersuaded that within the context of the taxing provisions of Chapter 96 the work "all" requires adifferent construction.

Should ESC interpret "all" to be the same as "substantially all?" Only in those parts of G.S.§96-9(c)4 permitting a voluntary assumption of tax status and liabilities, has the Legislature used"substantially all" term. It cannot be presumed that the omission of the qualifying word"substantially" from the involuntary assignment of tax status and liabilities was an oversight on thepart of the Legislature. In re Watson, 273 N.C. 629, 635 (1968). If the Legislature meant to say"substantially all," it could have said so instead of "all" without any qualifying words attachedthereto.

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ESC Precedent Decision No. 39In re The Staffing AlliancePage Two of Three

Should "all of the organization, trade or business" be interpreted as meaning only theacquiring of or succeeding to only those assets sufficient to carry on the organization, trade orbusiness? Employment Security Commission v. Skyland Crafts, Inc., 240 NC 727 (1954), is citedas a support for such interpretation. For the reasons set forth below, the undersigned no longerfinds this argument to be persuasive.

The Court in Skyland Crafts interpreted the following phrase appearing in G.S. §96-(8)(f)2:"Any employing unit which acquired the organization, trade or business or substantially all theassets thereof." G.S. §96-8(f)(2) was the statute that permitted ESC to assign to a new corporationthe tax status and liabilities of the old corporation without the consent of the either party; i.e.,determining that a corporation was a successor to an old corporation and that the tax status andliabilities of the old corporation was to be used in the determination of the new corporation's rate ofunemployment insurance contributions. G.S. §96-9(c)4 serves that purpose today. Of greatsignificance is the absence of (1) the descriptive term "all of" in G.S. §96-8(f)(2), a term thatcurrently appears in the involuntary assignment section of G.S. §96-9(c)4, and (2) "substantially allof the assets thereof" term in G.S. §96-9(c)4, a term that appeared in G.S. §96-8(f)(2).

The Skyland Crafts Court was persuaded that findings in the ESC decision to hold the newcorporation to be a successor because it purchased the physical assets that the old corporation hadon hand three (3) months after it ceased operating,

without evidence or findings to the extent of the assets of the old corporation on the date itceased to do business or the date the new corporation purchased its specificpersonal property, and without findings that the new corporation purchased the accountsreceivables, customers lists, good will, or trade name of the old corporation, would seeminsufficient to support the conclusion that the new corporation acquired substantially all ofthe assets of the old within the meaning of G.S. 96-8(f)(2), since the term "assets" ordinarilyembraces all property, real and personal, tangible and intangible.

Headnotes 2 and 3 at pp. 727-728.

It was in this context that the Court spoke of "continuity, the new employing unity succeeding toand continuing the business or some part thereof of the former employing unit." That is, the Courtheld that there must be more than the buying of physical assets, not that "all of the organization,trade or business" is required to be interpreted as meaning the acquiring of or succeeding to onlythose assets sufficient to carry on the organization, trade or business.

Based on the foregoing, the Commission concludes that The Staffing Alliance was not thesuccessor to Action Labor of North Carolina. Accordingly, the tax status and liabilities of ActionLabor of North Carolina shall not be used in the determination of The Staffing Alliance's rate of

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Based on the foregoing, the Commission concludes that The Staffing Alliance was not thesuccessor to Action Labor of North Carolina. Accordingly, the tax status and liabilities of ActionLabor of North Carolina shall not be used in the determination of The Staffing Alliance's rate ofunemployment insurance contributions. Thus, the undersigned's previous holding in Tax OpinionNo. 3188 to the contrary must be set aside, as well as the Unemployment Tax Rate AssignmentEffective January 1, 2003, mailed November 2, 2002. Finally, the cause must be referred to theESC Tax Department for whatever action necessary to implement this Order.

IT IS NOW, THEREFORE, ORDERED, ADJUDGED AND DECREED that theemployer’s exceptions to Tax Opinion No. 3188 be, and the same are, ALLOWED, Tax OpinionNo. 3188 is SET ASIDE, and the Unemployment Tax Rate Assignment Effective January 1, 2003,mailed November 2, 2002 is SET ASIDE .

IT IS ALSO ORDERED that this cause is REFERRED to the ESC Tax Department forfurther proceedings as set forth in this Order._________________________________________________________________________________

IT IS ORDERED ADJUDGED AND DECREED that the above decision shall constitute a“precedent decision” of the Employment Security Commission and a copy should be providedto each local and branch office of the Commission and said decision shall be provided to anyinterested member of the public, upon request, for inspection pursuant to ESC Regulation No.21.17.

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IN RE PENHOLLOW(Adopted February 1, 2010)

STATEMENT OF CASE:

The claimant filed a NEW INITIAL CLAIM (NIC) for unemployment insurancebenefits effective June 28, 2009. Thereafter, the Employment Security Commission (ESC)determined that the weekly benefit amount payable to the claimant was $494.00 and, during thebenefit year established by the claimant, the maximum amount of unemployment insurancebenefits payable to the claimant was $12,844.00.

The claim was referred to an adjudicator on the issue of separation from lastemployment. The Adjudicator issued a determination under Docket No. 00812 finding theclaimant disqualified from receiving unemployment insurance benefits under N.C.G.S. §96-14(1). The claimant filed an appeal from the determination and the matter came on to be heardby a Hearing Officer under Appeals Docket No. III-A-41926 on September 2, 2009. Thefollowing individuals appeared at the hearing before the Hearing Officer: Elizabeth Penhollow,the claimant; Larry Parker, witness for the claimant, and Jodi Briseno, the employer's ChiefFinancial Officer and Human Resource Manager. On September 16, 2009, Charles Whitehead,Hearing Officer, issued a decision holding the claimant disqualified from receiving benefitsunder G.S. §96-14(1). The CLAIMANT APPEALED to the Commission.

The claimant requested the scheduling of oral arguments. With appropriate notice beingmailed on November 17, 2009 to all parties, the matter came on to be heard and was heardbefore the Full Commission on December 10, 2009. Elizabeth Penhollow, the claimant, andAnthony Howell, the employer's President, appeared and presented oral arguments. JodieBriseno, the employer's Chief Financial Officer, was present as an observer. TheCommissioners reviewed and considered the record on appeal and all written and oralarguments presented by the parties. The Full Commission voted to reverse the AppealsDecision and to repeal ESC Precedent Decision No. 30, In re Garrett (1995).

FINDINGS OF FACT:

1. The claimant filed continued claims for unemployment insurance benefits for theperiod June 28, 2009 through July 25, 2009. The claimant registered for work with theEmployment Security Commission (ESC), continued to report to an ESC office and made aclaim for benefits in accordance with G.S. §96-15(a).

2. The claimant began working for the employer September 7, 2007. She last workedfor the employer on or about June 26, 2009, as a Sales Associate. Her last supervisor wasCameron Thigpen, the employer's General Manager.

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3. During her employment, the claimant was the top sales associate. Almost everymonth, the employer awarded the claimant a plaque for her sales. The claimant was paidcommission on her delivered sales.

3. On June 26, 2009, the claimant tendered a letter of resignation to the employer. Theresignation would be effective August 1, 2009. The claimant chose to give the employer andwork a 4-week notice of her resignation because she had $105,000 worth of sales for which shehad yet received commission of $5,000. During the notice period, the claimant would havereceived her accrued commission. The terms of the claimant's employment provided that anycommission due and owing to the claimant would not be paid to her after her last day of work.That is, the claimant would not receive any commission for delivered sales made before her lastday of work and unpaid on her last day of work..

4. The employer refused to allow the claimant to work the notice period. On the samedate, the claimant submitted notice of her intended resignation, Cameron Thigpen instructed theclaimant "to leave immediately and not come back." (This statement was relayed to theclaimant as coming from the employer's President, Anthony Howell.) The claimant compliedwith these instructions. Because she had not been paid the $5,000 commission on or beforeJune 26, 2009, the employer was not required to pay the commission under the terms of theclaimant's employment.

5. The claimant had no knowledge of an employer's policy regarding permitting or notpermitting an employee to work a notice period after submitting her intent to resign on adesignated date. The employer did not provide the claimant a copy of such written policy or tellher one existed. The claimant had no reason to know that she would not be permitted to workher notice period when she tendered her intent to resign with a notice period. Because of theemployer's policy on unpaid accrued commission, the right to or the absence of the right towork a notice period was a crucial term of the claimant's employment. The employer did notoffer into evidence a copy of a written policy on notice periods.

6. The decision to make June 26, 2009 the claimant's last day of work was made by theemployer. Other than submitting notice of her intent to resign, the claimant had not engaged inany type of conduct that placed her at risk of losing her job. The claimant was not paid wagesinstead of working a notice period.

MEMORANDUM OF LAW:

G.S. §96-15(e) governs the Commission's review of decisions issued by HearingOfficers. The Commission may “affirm, modify, or set aside any decision of an Hearing Officeron the basis of the evidence previously submitted.”

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Among other things, the Employment Security Law provides:

An individual shall be disqualified for benefits . . . for the duration of his unemploymentbeginning with the first day of the first week after the disqualifying act occurs withrespect to which week an individual files a claim for benefits if it is determined by theCommission that such individual is, at the time such claim is filed, unemployed becausethe individual was discharged for misconduct connected with his work.

G.S. §96-14(2).

Misconduct connected with the work is conduct evincing such willful or wantondisregard of an employer’s interest as is found in deliberate violations or disregard of standardsof behavior which the employer has the right to expect of his employee, or in carelessness ornegligence of such degree or recurrence as to manifest equal culpability, wrongful intent or evildesign, or to show an intentional and substantial disregard of the employer’s interests or of theemployee’s duties and obligations to his employer. G.S. §96-14(2). This definition has beenjudicially interpreted on many occasions. See, e.g., Intercraft Industries Corporation v.Morrison, 305 N.C. 373, 289 S.E.2d 357 (1982); Yelverton v. Kemp Furniture Industries, 51N.C.App. 215, 275 S.E.2d 553 (1981); In re Cantrell, 44 N.C.App. 718, 263 S.E.2d 1 (1980); Inre Collingsworth, 17 N.C.App. 340, 194 S.E.2d 210 (1973).

The Employment Security Law further provides:

An individual shall be disqualified for benefits . . . for a period of not less than four normore than 13 weeks beginning with the first day of the first week during which or afterthe disqualifying act occurs with respect to which week an individual files a claim forbenefits if it is determined by the Commission that such individual is, at the time theclaim is filed, unemployed because he was discharged for substantial fault on his partconnected with his work not rising to the level of misconduct. Substantial fault isdefined to include those acts or omissions of employees over which they exercisedreasonable control and which violate reasonable requirements of the job but shall notinclude (1) minor infractions of rules unless such infractions are repeated after a warningwas received by the employee, (2) inadvertent mistakes made by the employee, nor (3)failures to perform work because of insufficient skill, ability, or equipment.

G.S. §96-14(2a).

When a claimant has been discharged from work, the employer has the burden of proof to showthat the claimant’s discharge was for a reason that would disqualify the claimant forunemployment insurance benefits. Intercraft, 305 N.C. at 376.

ESC Precedent Decision No. 30, In re Garrett (1995), in pertinent part, provides:

The Commission has held in some cases that an employee has beendischarged where an employer refuses or fails to allow the employee to work arequired or contractual notice period. However, if the employer is able to show (1)it has a policy of not allowing or requiring employees to work a notice, (2) it has a

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policy on the length of the notice period contrary to the notice period offered orgiven by the employee, (3) the employee was paid for the notice period, or (4) itestablishes for some other reason a reasonable basis existed for not allowing theemployee to work an offered notice period, the employee's separation fromemployment shall remain an issue to be decided under G.S. §96-14(l). Thequestion is whether the employee left work with or without good cause attributableto the employer. The Appeals Referee shall not adjudicate the case as a dischargeunder G.S. §96-14(2) or G.S. §96-14(2A).

In passing upon issues of fact in cases involving contested claims for unemploymentinsurance benefits, the Commission is the ultimate judge of the credibility of the witnesses, andof the weight to be given to their testimony. The Commission may accept or reject thetestimony of a witness, in whole or in part, depending solely upon whether it believes ordisbelieves the same. See, Moses v. Bartholomew, 238 N.C.App. 714, 78 S.E.2d 923 (1953).When the evidence as to the circumstances surrounding a claimant’s separation fromemployment is controverted, the Commission must resolve the controversy by making findingsof fact based on competent and credible evidence. See, Phillips v. Kincaid Furniture Company,67 N.C.App. 329, 313 S.E.2d 19 (1984). The Commission is not bound by the credibilitydeterminations made by the Hearing Officer. Forbis v. Weselyan Nursing Home, Inc., 73N.C.App. 166, 325 S.E.2d 651 (1985). If there is a reasonable basis for the credibilitydeterminations and the evidence relied upon is not inherently incredible, the Commissionusually defers to the Hearing Officer’s judgement in such matters

CONCLUSIONS OF LAW:

In the present case, the Full Commission concluded that the employer did not establishthat (1) it had a policy not allowing or requiring employees to work a notice, (2) it had a policyon the length of the notice period contrary to the notice period offered or given by the claimant,(3) the claimant was paid for the notice period, or (4) for some other reason a reasonable basisexisted for not allowing the claimant to work the offered notice period. Applying In re Garrett,the Full Commission concluded that the claimant did not leave work as found and concluded inthe Appeals Decision, but was discharged from employment by the employer. Thus, theemployer had the burden of presenting competent evidence that showed the claimant wasdischarged for reasons that would disqualify her from receiving unemployment insurancebenefits. For this reason, the employer’s evidence and any evidence supportive of theemployer’s case presented by the claimant were closely scrutinized. As the ultimate fact finderand decision-maker, the Full Commission made all necessary and pertinent findings of factbased on the credible and competent record evidence presented regarding the circumstancesleading to the claimant’s separation from employment.

The Full Commission also concluded that the Appeals Decision erred in failing toaddress the claimant's knowledge of the employer's purported policy on working notice periods.The Commission has consistently held that when a claimant's separation from employment isdictated by an employer's policy, the employer must show that the claimant knew or shouldhave known of the policy.

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The Full Commission concluded from the competent and credible evidence and the factsfound therefrom that the employer has failed to carry its burden of showing by competentevidence that the claimant was discharged for conduct rising to the level of substantial fault ormisconduct connected with her work. Accordingly, the Appeals Decision must be reversed.Furthermore, the claimant must be held not disqualified from receiving unemploymentinsurance benefits.

The Full Commission concluded that the language in paragraphs 3 and 4 of ESCPrecedent Decision No. 30, In re Garrett (1995) was inconsistent with other ESC PrecedentDecisions, as well as relevant court cases, that addressed employer's policies. That is, theidentified language failed to require that (1) the policy on notice periods be written and madeknown to all employees, or (2) the policy on notice periods be an established custom andpractice and made known to all employees, and (3) the employer has the burden of proving theexistence of the policy on notice periods and the employee knew or should have known aboutsuch policy. The Full Commission, therefore, voted to revoke In re Garrett (1995), in part, andthat this decision be made an ESC Precedent Decision.

DECISION:

IT IS NOW, THEREFORE, ORDERED, ADJUDGED AND DECREED that Appeals DecisionNo. III-A-41926 be, and the same is, REVERSED.

IT IS FURTHER ORDERED that the claimant is NOT DISQUALIFIED from receivingunemployment insurance benefits.

IT IS ALSO ORDERED that ESC Precedent Decision No. 30, In re Garrett (1995) isREVOKED, in part.

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Precedent Decisions With Index Publish Able 02-09-10 Revised